You have two options:
1) CLONE (i.e. Machrium Reflect Free), or
2) Download W10 and do a clean install
You do not need the license code if reinstalling Windows 10 to the same PC. Microsoft has it stored on their servers and will auto-activate.
I'd consider getting a 2TB HDD since it doesn't add too much extra cost (unless for laptop). An SSD will also make things feel a bit snappier but the cost is much higher, so depending on how you use the PC it may be hard to justify.
*If you have a LAPTOP, you'll want to get a USB device to put the 2.5" HDD in so you can copy files over.
https://www.newegg.com/Product/Product.aspx?Item=9SIA1DS5F44968&cm_re=usb_2.5%22_enclosure-_-9SIA1DS5F44968-_-Product
To CLEAN INSTALL you would:
a) download the W10 Microsoft Media Creation Tool
https://www.microsoft.com/en-ca/software-download/windows10
b) have your W10 password/email written down to login with SAME account
c) backup data, pictures, passwords etc (though if you keep the 500GB for now you can boot back into it)
d) shut down, and unhook 500GB HDD to be safe
e) attach new HDD
f) BOOT to the W10 USB stick (or DVD-DL) you made
g) PARTITION during install (I'd use about 200GB for the Windows drive and the remaining for the 2nd partition, since it's then easy to CLONE to a 250GB SSD later)
https://www.youtube.com/watch?v=_8UN1njjDkM
h) do NOT enter a key when prompted. just skip that
i) install video, audio drivers etc once booted up
j) setup fan profile, antivirus, other programs, e-mail etc.
k) when everything works great, FORMAT the old HDD (can copy any data you still need back to the 2nd partition on main HDD). Choose "FULL" NTFS format so it builds a bad sector table (takes a few hours)
l) finally, make a BACKUP IMAGE of C-drive (Windows) to the 500GB HDD in case you have any issues. Use the included W7 backup solution in W10 or buy a good program like Acronis True Image that can automate backups and DELETE older ones. I have weekly backups done.