IMac unable to restart after downloading latest software update (including iTunes 11.2)

Question

My system is a mid-2007 iMac (Intel) with latest software updates always promptly installed (OSX Mavericks, etc) and 320 GB internal HD, 4GB Ram.
Today the software updater informed me that an update to iTunes was available and so I allowed it to download the update and then restart the computer. The restart was not successful - the computer display will show the status window progressing as the update is installed and then nears completion, but will freeze at the apparant point of completion and the restart will not complete. I tried restarting several times and it always hangs up and does not complete.
I then ran the Disc Utilities program - first time I ran it, it identified disc problems with the internal HD  and proceeded to repair them. Following that I trried to restartt and it ran into the same difficulties and did not restart. Subsequently I ran disc utilities and it reports the internal HD to be fine. I've also tried several times to boot the computer and restore from my Time Machine backups and it will not complete the restore. I do get to the screens where I can select the volume to restore from, the volume to restore to, and so forth. After these efforts were not successful, I finally tried to re-download OSX and do a clean system restore, it progressed nearly to completion and then aborted the system installation without completing.
Since having this problem I've therefore been unable to use the computer in Mac mode. I had just about concluded that my hard disc must be replaced, when I decided to see if I could restart running Windows (bootcamp), and I was able to do that successfully. The hard disc is therefore not damaged, or at least the partition of the hard disc used by Windows is not damaged.
Is my most likely option to replace the hard disc or is there something I can still do, in order to see if the hard disc can be restored using a saved backup, before I replace it?
I have the further complication of finding that the Apple store will not replace the hard disc for my computer because it is over 5 years old. I can probably locate a shop such as Best Buy locally who can do that, or I can simply purchase an external hard disc and use that as my primary hard disc until I either replace the internal hard disc or simply replace the computer. Since it is a 7 year old iMac, it would not be surprising to have to replace the hard disc after this length of time. I also see that there are instructions available online to explain how to replace the internal hard disc myself, but I'm unsure at this point whether or not I want to do it myself.

Answer 1

Lacking any responses to my initial post above, I will briefly update how I resolved this issue today.
Installed new external hard disc, 1 TB WD My Passport for Mac, and straightforward setup involving first installing current OS X operating system, then system migrator utility to rebuild the same setup as saved in latest Time Machine backup. The whole process was somewhat time consuming due to my internet connection speed and USB data transfer speeds but it went without any issues. The computer now boots up and operates identical in all respects to how it did before the problem occurred.
Regarding the internal HD of my iMac, if I now run Disc Utility to verify the disc, it reports "appears to be OK". However, viewing the disc usage in "About This Mac" window, it displays as entirely empty. Opening it in the finder also shows only a "Apple Hot News.mbox" file and a single .jpeg image, and .nothing else.
Interestingly, the Bootcamp partition of my iMac's internal HD continues to work fine and appears unaffected by the problem. I use bootcamp rarely but still will plan to set up a replacement bootcamp volume on the new hard disc soon, in order to take its place.
That the problem surfaced coincident with the software update may have been nothing more than bad luck? At this point I have no reason to suspect that the softward update had anything to do with the difficulties.