So instead of going the straight (yet difficult) route of recovering the bad partition, I've decided to use my spare HDD as primary. Installed all my essential programs in it, and recovered stuff (firefox bookmarks/history, iTunes library data, etc) from the bad partition (using EaseUS Data recovery free version), and voila, my bookmarks and history are back. Now just installing programs, trying to make Windows look like as it used to be, did all the settings as they were earlier. The bad partition is still there, untouched. Maybe I'll come back to recovering it someday, but for now, I'm fine with the HDD I'm using. I was too much fed up of the hassle that I was going through (although it was basic stuff, but I'm still a noob when it comes to data recovery and backups). Another reason is that I've found out that the bad HDD contains bad sectors (not physical, I believe). So I plan on using it as rarely as possible, and surely not using it as a primary drive.
So for now, the problem is solved. I'll restart the issue sometime later, if required. Otherwise, I'll probably format the bad partition and start using it for data, as long as it lasts.
And yes, I'll set up a backup system as well, I've learned a lesson. it was a close shave, all my data could've gone, but luckily, it's safe and the Windows partition died instead. My first priority now, is to backup my data from that HDD.
I'd like to thank everyone who helped me in this thread, especially Rick and Tom, for helping me out with so much detail. Can't express my gratitude, thank you guys :)