The Custom Install of Win 8 using the Upgrade Media is easy. You simply choose the Install by Creating Media option when it is presented. This allows you to burn a bootable DVD or Flash Drive to boot to. You would then choose Custom Install and follow the prompts. For even further cleaning you can choose Advanced Disk Options on the next screen, choose the partition to install to and choose Format. Make a data backup first. I would also create a full system Image prior to the Win 8 installation.
As far as the remainder of your question, this will be personal choice. Win 7 is also a very fine OS. During the beta period of Win 8 I dual booted Win 7 and Win 8 betas. When Win 8 was finally released I deleted Win 7 (after making an Image of course) and went with Win 8 Pro. I'm glad I did. You will have to read through the various threads and make up your mind. I believe Win 8 is the way to go. You can customize your Win 8 installation to make it look and feel like Win 7, and still get the advantages I feel Win 8 has to offer. We have discussed all this in other threads and I will not rehash them here.
You can always reinstall your Win 7, then dual boot Win 8. This will allow you to continue to use a fresh install of Win 7, while starting down the road to Win 8. In this case Win 8 can actually be installed first, then create a partition and clean install Win 7.
I went further and have a separate partition for data and moved all data to this new partition using this method. Afterward you can change the data pointers to point to the data drive from both OSs. This allows the data to remain synced no matter which OS you are using. Plus this keeps the data safe no matter what happens to the data. Plus it makes it easy to back up your data using File History in Win 8.
so what state is the laptop in now? Does it still have win 8 running or no? If you have access to it then hit the setting icon in the charms bar (this appears when the cursor is placed either top or bottom right of the screen). Look for change pc settings near the bottom and click that. On the next screen look for 'General' on the left and then click that. Now on the next screen scroll to near the bottom and either 'Refresh' or 'Reinstall' windows.