Virus hides files, shrinks total capacity

This Dell technician is partly right. In the past, there were viruses which could damage a hard disk. They did this my moving the read-head of the drive to a sector outside the existing range, causing the head to bump against the internal frame of the drive itself, causing damage to the disk. But that was almost 25 to 30 years ago and hard disks have become more robust ever since.

Now, it is possible that something went wrong inside the BIOS settings of this laptop, thus the BIOS won't recognize the hard disk anymore, or just can't access it. This could be some virus trying to damage the firmware or just a user messing with the wrong settings. Restoring the proper BIOS settings should fix it, although you would need to know those settings first.

Finally, if you have warranty on the hardware then it doesn't exactly matter how it got damaged beyond repair. It is broken so they have to fix it. (Although you might want to check the warranty papers that you received with your purchase for exact details.) Do make it clear that you demand a replacement for this disk, which falls under the warranty. (Else, be prepared to ask for legal advise!)

I myself have a Dell desktop. I know they install their OS from a special disk image instead of doing an official setup. A regular setup would just format the disk, mark bad sectors and do a bunch of other stuff to make sure the disk is okay. Restoring a disk image won't do such checks but just does a quick format before putting the image back. If this fails for whatever reason, oops...

tl;dr: This is space reserved for metadata storage.

This article about NTFS technical side will give you some more details, but most of this space is taken by the Master File Table. (Some space is also used for the boot sectors, and so on.)

What explains a good part of the "bloated" metadata in NTFS compared to, say, FAT32 is the need to store Access Control Lists - although there are more things in there.

How much space is used by the MFT?

There are 4 settings available when you format a hard disk in NTFS:

• Setting 1 reserves approximately 12.5 % of the volume. (Default)
• Setting 2 reserves approximately 25 %.
• Setting 3 reserves approximately 37.5 %.
• Setting 4 reserves approximately 50 %.

This is because the MFT size is proportional to your number of files. A standard (12.5 %) MFT size will be enough to provide metadata space for all your files if you fill the rest of your disk with 8 KB files. Of course, since some files are going to be much bigger, this is an average.

If you store a large number of smaller files to your disk, there won't be enough space to accommodate all their metadata in the reserved MFT space. This is not fatal, as a new MFT cluster will simply be created elsewhere. However, it will cause MFT data fragmentation, which is bad, as in, can cause severe performance degradation in some cases.