Is a system partition just the partition on which the windows OS is installed and nothing more than that. What other purposes does it have? What happens if I fill it up with data, will the system crash? will it fail to boot again? I'm using Windows 7.
A partition is not just where the OS is installed. What you are referring to is typically just called the OS partition or the Boot Partition because it is one that specifically has the OS installed on it, and it's the one you boot into.
A partition is a section of your hard drive. It usually has a designated file system if it is going to be used to store data. It has a header that includes information about that file system, the size that has been allotted for that partition, and a file table that tells your computer where each particular piece of data is stored physically on the drive.
The purpose of a partition is to allow a hard drive to store its data and communicate it in a format the operating system can use. Some operating systems prefer a particular file system in order to work (for instance, newer versions of Windows prefer NTFS).
You can have multiple partitions with different file systems, allowing for different programs and operating systems to work with those differing file systems.
Yes, problems can occur when the OS partition has no more space. It may or may not crash but you can run into many problems because programs have nowhere to write to other than memory. Your browser may stop working because it has nowhere to put downloaded data. New devices may not work because your OS has no place to download new drivers. This is just a few of many potential problems.
By default, Windows will start yelling at you if you get close to filling up the boot partition.
The system partition may, or may not, be the same partition on which you store data. That is the seed of what could be a very long and irreconcilable argument.
You asked "What happens if I fill it up with data, will the system crash? will it fail to boot again? "
The system will warn you when space on the drive is getting low. The system is not likely to crash if you fill the drive, but you won't be able to save files, and apps will stop working as usually the TEMP location is on the same drive (and apps won't be able to save temporary files where they are needed.)
It would be relatively rare for any corruption to occur, or for the system to fail to boot, just because the drive is essentially full. But if you ignore all the warnings, you'll eventually not be able to do much.
I suggest starting with browsing to the folder located as %TEMP%, and looking for PDF files to remove. Almost everyone uses Acrobat, the program stores a copy of EVERY PDF you open (and doesn't clean them up automatically) and "disk cleanup" doesn't touch those PDF files. Also look for temporary image files, especially JPGs, as many mail programs & others store a copy of every image file they access. And then, of course, there are those "temporary internet files" .....