I keep getting the error that

YES. This IS the problem.

When Windows is installed on a computer, it assigns a hash value for the major hardware components inside the computer.

You may think of it as assigning serial numbers, for each major hardware component. In reality it isn't a serial number, though. Just a specific value attached to THAT hardware component.

Some of the major hardware components such as;

1.Processor
2.Harddrive
3.Motherboard, (Actually the BIOS program and version, which is burned into the BIOS chip, on the motherboard)
4.Graphics chip (GPU)

Now THAT genuine copy of Windows is matched to THE computer it was installed on.

(It is a security feature that Microsoft implemented long ago. A feature to try to insure that their software would not be stolen.
Microsoft Users License states "One genuine copy of Windows per One computer"

Helps to keep thieves from taking One Genuine copy of Windows, and installing it on 1000's of computers.

{Microsoft makes one Master disk of an Operating System. Such as Windows 95, or 98, or 2000, or Me, or XP, or Vista. Then they copy off the genuine version that you, or I receive)

The Restoration disk has the needed Windows files. File for Windows System32.

Files you need right now. Except the ones on the restoration disk you're trying to use, is for another computer.
The Restoration disk also has needed Drivers, and also has the files needed for the Programs, and Applications.
Trouble is, they are for the other computer, and not the one you have now.