Disk space being consumed by files that don't exist

what do you mean system files? what I did was to select all the files inside the C drive then click on properties for the size.

System files is in the C drive right?
Is the swap file also in C drive?

System Files are normally protected files that are required for the system to operate. These tend to be hidden, even you select hidden files.

The Swap file will be on the C Drive, unless you have manually moved it.

If you open Windows Explorer -> Tolls -> Folder Options -> View you will see a settings that says "Hide Protected Operating System Files (Recommended)" or to that effect.

If its ticked, you will not be viewing them.

Cheers