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OP, as far as games go, the store pages have system requirements including the OS required to run games on Steam. Steam should work fine on Windows 7 32 bit.
As far as the error message you have, try troubleshooting it.
https://support.steampowered.com/kb_article.php?ref=1456-EUDN-2493
I'm currently running Xp 32-bit and Steam runs just fine.
As for games.. be careful. See. The 32-bit version of 7, 8, and even 10 are uncommon variants so many developers simply assume that if you have 7 then you have the 64-bit version.
Generally speaking, if you're running 7, in many cassess assumptions are being made about the amount of ram you have access to.
You do have to be quite discerning in your choice of games though. (Just refer to the min specs on each store page, and use your common sense re the GPU capability...)
If its an ex-company laptop then its quite possible that its set up to block certain sites in its hosts file (nobody wants employees playing games when they should be working). It depends on how diligent the companies IT department was.. :)
The hosts file is located at:-
C:\Windows\System32\Drivers\etc
Open it in notepad and look to see if there are any entries showing steams web urls.
If there are, then delete the offending lines and save the file.
(The entry will look something like this:-
127.0.0.1 steamcommunity.com
or
0.0.0.0 steamcommunity.com
)
Basically you`re looking for any line with a steam address in it.
Write down the key and then go wipe out the drive with clean install of
Windows 7 64bit or Windows 10 64bit
If that Win7 is Home Premium; then use Win7 Home Premium or Win10 Home
If that Win7 Professional; then use Win7 Pro or Win10 Pro
Of course it runs; the issue is Windows OS 32bit is limited to 4GB of Max RAM.
And many games will require a 64bit OS
32bit OS and up to 4GB of RAM is only good for very old low demanding games or indie games really.