Scratch disc (might not be called that any more!) for Photoshop mainly, I think the rest of the CC suite use it too. As I understand it’s for when the ram fills up and PS likes to have it on a different drive to the install.
As to space – Windows plus CC mainly (Photoshop, Indesign, Premiere, After Effects) etc all add up pretty quickly. Plus 3ds Max, a few odds and sods and a couple of games and it’s not long before that 120gb starts to look pretty tiny!
480gb for £45 is an eBuyer deal of the day today. I might not go for that exact one (dunno if WD Green are any cop) but there seem to be a few around the £50 mark.
**edit** Yep I’ve done cleanups, I’m basically constantly juggling stuff to keep i to a reasonable size. I don’t use all the software all the time, but it’s pain to have to keep uninstalling / reinstalling.