Oh dear, lots of errors over the period.
I assume that your niece has done her anti-nasty scans to make sure that there is nothing lurking around and upsetting the system ?
Certainly try SP1 from the disc, doing so may just clear out or repair anything corrupt in there, and then try the rest again as you suggest.
I know it is a bit of a chore to do so, but it may help to be in attendance when it is installing...at least then if it goes wrong you will be able to spot when and possibly why.
I must confess I don't like doing auto updates....much prefer to download and save them and then install a small batch at a time......easier to identify any bad ones if they occur. Again a chore, but good for the peace of mind.
In the meantime. TD trundles off to have a look through the Microsoft knowledge bases armed with these KB numbers in case there is a known issue with any of them, in which case there may be a fix.......typical Microsoft..issuing patches to repair patches.