[Defraggler Disk Visual]

Let's say I have a Tb HDD and I'm only really consuming 1/8 of that. Is it effective to have all files toward the outside of the disk, or inside? Or it is better to have things spread out, but defragged? I'm wondering if information would process faster if everything was at the faster-reading portion of the disk, or if it would just cram everything too close, making it harder for the CPU and RAM to do their job? 

Sorry if my questions seem a little simple minded. I've never thought to ask about how hard drives function or how defragging works before. This is all new to me. But thanks for the timely responses so far.

[Defragging for Game Improvement]

Is there a determined file size, or certain advanced options, or a specific way I should defrag to maximize the speed of my games on Steam? It would be nice to have a few pointers from people who've defragged with this in mind. Thanks.

[Defraggler Disk Visual]

So, when files are at the top of the visual display versus the bottom, what does that mean? Which side, top or bottom, is the outside of the disk versus the inside of the disk?