It's just a free account - any Hotmail, live.com or outlook.com email will do. The Microsoft equivalent of having a Google or Facebook account. (An MSDN Subscription is the other usual option, though that's associated with a Microsoft account anyway. I don't think there are actually any other account types these days.)

I haven't looked too closely at Win 10, but I'd be surprised if you could install it with only 17GB. It's possible that it would clean up a lot of the existing Windows files and not take that much though, I really don't know right now.