You wrote BIOS recognised the HDD. This gives two pieces of information:
1) you attempted to use this machine in BIOS mode. Question: is it possible to change it to UEFI mode? Question 2: If it is, after changing to UEFI, will it detect the HDD just as well (some hints here)?
2) your hdd is alive (most probably). Question: how was it originally partitioned, MBR or GPT? Question 2: Do you have a capable partition utility, that can give a reliable information about your hdd (like BootIT NG, BootICE, or similar)?
For ms windows environments the hdd must have a partitioning scheme that matches the used hw-to-sw interface system, i.e., BIOS-MBR or UEFI-GPT.
More questions:
- is your ultimate goal to restore your VAIO to its factory original state? Or are you OK with a fully working VAIO with MS W7 on it? Regarding the factory installed copy of the W7: I trust the device has the key (COA sticker) somewhere on the machine. This should allow reinstalling W7 by other means - see more here, or here.
- have you tried to perform some low level tests on this hdd, to get an idea whether or not it is in fully good shape? See for example Hard Disk Sentinel, it can read the S.M.A.R.T. information off the hdd.
- do you have a way to lift this hdd from the VAIO, and connect it to another PC? (I.e., using an USB-to SATA dongle, or simply connected internally in a desktop PC.) You can run then the standard W diagnostics and see how the hdd is. Also, you can back up data from the HDD, if that is a requirement.