I wouldn't recommend messing around with the partition table if the drive contains the only copies of irreplaceable data... resizing live partitions *usually* works out OK, but if it doesn't there will be tears before bedtime.
Really don't want to reinstall, parents have thousands of files spread out everywhere and no second hard drive.
This doesn't sound good anyway - would now be a good time to mention to your parents the need for backups?
As far as rescuing the existing installation goes, I'm not sure what to suggest in addition to what you've already done... it does sound like the system is pretty messed up, and you could be endlessly chasing wild geese to no great effect.
What you could do is use Macrium Reflect to create an image of the existing setup, save the image on a second drive, do a format/reinstall, install Macrium again, then copy (not restore) the image file back to somewhere on the original drive. Macrium will let you mount the image as a virtual drive, so that all your parents' stuff will still be accessible as long as they can find it in the folder structure, and they can copy it to a more convenient location in the new installation (My Documents, My Pictures or whatever) at their leisure.
Obviously the practicality of this would depend on the total size of the existing installation, and the size of the HDD - Macrium will compress the image, but you might want to uninstall all the applications first (you won't be needing them, as the image will just be a data store), clean out any temp files, empty the recycle bin and delete any system restore points before actually creating the image.
It's not very space-efficient admittedly, but at least you don't run the risk of accidentally blowing away irreplaceable family photos stored in some barmy location (and not backed up, needless to say).
It might also be an idea to partition the drive as C (OS/apps) and D (Data) when you come to reinstall, and relocate the "special" folders (My Documents etc) onto the D partition, so that user data gets saved to D by default, and things will be easier when you inevitably have to go through the whole process again. Again, Macrium is your friend here, as you could then create an image of the clean C installation, store it on D, and simply restore it in a few minutes when things go horribly wrong, rather than spending hours reinstalling from scratch.