Yes, the only way to fix this issue is to do a backup and replace this drive. Why do you want to risk data on this drive when clearly there are physical issues already reported by S.M.A.R.T.?
Reallocated Sectors Count - Potential indicator of imminent
Count of reallocated sectors. When the hard drive finds a
read/write/verification error, it marks that sector as "reallocated"
and transfers data to a special reserved area (spare area). This
process is also known as remapping, and reallocated sectors are called
"remaps". The raw value normally represents a count of the bad sectors
that have been found and remapped. Thus, the higher the attribute
value, the more sectors the drive has had to reallocate. This allows a
drive with bad sectors to continue operation; however, a drive which
has had any reallocations at all is significantly more likely to fail
in the near future. While primarily used as a metric of the life
expectancy of the drive, this number also affects performance. As the
count of reallocated sectors increases, the read/write speed tends to
become worse because the drive head is forced to seek to the reserved
area whenever a remap is accessed. If sequential access speed is
critical, the remapped sectors can be manually marked as bad blocks in
the file system in order to prevent their use.