The 16 gb solid state drive (NOT hard drive) on a Chromebook allows users to temporarily download files to their Chromebooks if they want to open them online, or as a holding place before uploading to cloud storage. I have a Chromebook and use the 16 gb SSD all the time. For example, I've download mp3s and movies onto the hard drive so I can listen/watch them when on a plane. In addition to the browser, Chrome OS has an integrated video/audio player and a file manager that looks like any file manager for accessing and managing files on the SSD.
Chrome OS is not just the Chrome browser. Even in a Chrome browser on a Windows laptop there are a lot of other plugins and programs that need to be running to make it work. For example, Adobe Flash. When you visit a website with Adobe Flash content on a Windows laptop with any browser, if you don't have Flash installed on your computer, you won't be able to view the content. Since you cannot install any programs on a Chromebook, Google needs to update the Chrome OS if they want to give users the latest version of Flash. Other examples include video codecs, ability to handle zip file formats, rendering of PDFs - these all require updates of extensions that are not part of the Chrome browser. These updates happen automatically, in the background. A user of the Chromebook on the mainstream stable channel may not even realize it when their OS is updated.
I read a lot of comments that say Chromebooks are too expensive for what they are. But in my opinion, $299 is not a lot of money. I have a high-end Windows laptop, an iPad, and recently, a Chromebook. Out of those three computers, my Chromebook is the cheapest and gets 75% of my use, my iPad about 20%, and my Windows laptop about 5%. It is a fantastic device, well worth the price.