I does not sound like a hard drive issue(although shouldn't rule it out) Maybe just a windows 7 problem.
The hard drive is most likely perfectly fine, as it allows you to get that far.
Easiest thing to do is take the hard drive out, and get a SATA to USB 2.0 adapter and transfer all the needed files off...I.E. pictures, documents, trainz data etc.
Then run chkdsk on it using the computer you hooked it up to and see if anything is found wrong, if so it will be corrected, then you may be able to boot to windows 7 perfectly fine. However sometimes if chkdsk finds a lot of errors or severe errors everything will be lost, making you reinstall Windows.(reason why I said back up the data prior to running chkdsk)
Then simply transfer everything back to it's respective location.
If it turns out to be the hard drive, you will notice that you will get a lot of read/write errors. To circumvent this for a little while(so long as the drive holds out) you can simply copy the files in smaller batches. IE. If you try to copy 300 files you may get a read/write error. So copy 150 instead, if you still get it then go less, say 75, or 100 files.
Sometimes an entire folder can't be copied over. So simply go into the folder and copy the individual folder(s) or file(s) to a "replica" on the new computer. You will come across some files that simply cannot be copied...those are a lost cause unfortunately.
However the worst case scenario is that the computer BIOS as well as Windows will not recognize the drive at all from the get go or after sometime of trying to get the files off of it, it may die. Or if it does not power up at all. That can also be "fixed" with getting an exact replica of the drive and swapping out the PCB board...Sometimes it works, sometimes it doesn't.
Then the absolute final way to get the data is to send it out to data recovery specialists...They operate in class 1 clean rooms and open up the hard drive and replace parts until they find the culprit. But then can costs thousands of dollars to do simply because of the building and equipment needed to sustain a clean room. But even that has a chance of not working.