Personally i am using Mint and till now i don't have no any issues with it at all. So, i suggest you to go for Mint. But, you can also try Debian there is no any problem.
Yes, this is a common problem with pendrives, i suggest you to format your pendrive again with another file system then it will work fine. If it is not recognized by your pc, try in some other PC or try to format in command mode.
I faced same issue with Windows 8 in my PC, some time it automatically got restart and shown the error at the time of reboot. I didn't get solution for that finally i install Windows 7, now my system is working properly.
I strongly prefer you to the retail version of windows 7, the advantage of retail version is that in case you want to change the hardware of your system, then you can easily move your OS to another one and re-activate it with your key easily.
I have same problem with me also before one your back, i just suggest you to please change your port with your manufacturer.
It definitely resolve your issue.
To make you PC cool and make it to run smoothly, just place the fan in the back side of case, it exhaust all the heat from inside the case and keep it cool to work continously.