Follow my Windows Reinstallation Guide/A Clean Install of Windows 7. Use a Digital River .iso (Step 1b) in your case use the 32 bit Home Premium .iso and create a bootable .iso. Ensure that you delete the ei.cfg file on the bootable USB as instructed otherwise you will not be given the option to install Windows 7 Starter.
For Microsoft Windows 7 Product Activation as you have wiped the system already so you cannot carry out Step 1c and as I don't have the ABR Dell Windows 7 Starter Activation File you cannot carry out Step 11b. As you have the 25 Digit Product Key follow the alternative Step 11e and active via automated Microsoft phone activation.