1. What the articles should be advising is too stop using unsecured networks designed from 10-20 years ago and upgrade your entire network to a modern ip 6 based model which has simple to use and much safer security built into it from the ground up. That’s not the same thing as just turning off a hidden share which does not really prevent a hacker from entering your network.
2. A hidden share is just a normal share with a $ symbol added on… it just tells the explorer to not show the share (by default) and adds no extra security beyond this so if the user knows that the share is there… even if they aren’t sure of the exact path then it doesn't make any difference to the networks viability.
3. It is most likely system restore that is putting the files back in but it could also be the efi drive detecting the error... just depends on which service pack level you are using.
4. As a practical matter I agree with what Fixer1234 posted with perhaps a commercial or Edian firewall between the machine and other network parts… at least between the internet but without knowing what you expect this system to do & perhaps some idea of a budget it is very hard to give solid advice.
Tried Vista-it grated on my nerves. Been using Win 7 at libraries for a year now- if I could cuss here I could tell you what I think about this OS, but since I can't, I won't try. Not even gonna try Win8, and after reading the reviews, it looks like I'm not missing much, unless you count even more irritation than Win7 provides as 'missing much'. So no thanks.
Hidden shares with the $ are most definitely not "normal" shares. Normal shares I can nuke into oblivion, turn off the dang PC for the night, turn it back on the next day, and the normal shares are still gone. Same with the Telnet, SystemRestore, and everything else I've erased, uninstalled, disabled, etc. These gawd-awful $shares return again and again. Whatever mechanism or registry code that brings them back and overrules my choices to eliminate them must be terminated (with or without extreme prejudice!), and I'm still looking to find out how.
Not sure what "efi drive" is. Google suggests its connected either to UEFI or Intel platform. If so, I have neither. My custom build is based on AMD legacy components, BIOS motherboard, and so on.
Already have software firewalls (one for XP Pro and NetSecL has its own) and router firewall, but this is off topic.
5. As a final note, ime stripping xp of too much network infrastructure will just make the system slow and unstable.