maybe I should use some of that space to clone my C: system drive
Frame challenge time. Why? What failure mode are you hoping to protect against?
If I were you I'd simply periodically snapshot the C: drive (using Windows' built-in facilities) to an external drive (or even sufficiently-large USB device) that I then kept safe somewhere.
Just use the extra space as extra space. Don't get complicated.
Windows won't boot from a USB drive
It absolutely will, given a sufficiently new PC, and sufficiently new Windows, but that's not what I'm suggesting. It will also boot from the recovery media that I'm suggesting you create instead.