From the defaults, just click on one of the folders you don't want backed up and click "Remove". This should prevent File History from backing it up. Also, the Windows backup has never truly been, you might say, a full featured backup option. If you want to really make sure your entire system is backed up, you should use an additional (preferably external) disk drive, and perform an image backup using a solution like Acronis. There just aren't many options with File History for it to be very viable, other than that it may protect your important documents, but not much more than using OneDrive, Google Drive, or Dropbox would.