Mam, most of what you got, is not going to work like that.
Microsoft Store Online
If you have the original windows 7 installation disk, use that tool I provided and copy it to the usb.
If your going for x64 & x86 install you will need 4gb flash drive for it to format and make a bootable one.
For your netbook, I would recommend you use your main hdd for the install.
Do a full format as it will help the installation process go along smoothly.
If you wanted to, you could install your programs to a usb device if your on limited on space.
I recommend about 16gb or 32gb flash drive SD-HC card for normal stuff you use every day.
You have options and its highly doable matter of fact I am working on a net project again.
Let us know it how goes from there.