Sounds like the drive needs a good cleaning. I start with a floppy drive cleaning diskette, and see if that clears up any read problems... The loud sound your hearing is most likely the drive having seek errors from being dirty, or a worn out drive, hard to say without seeing/hearing it. If memory serves me correctly, it was a panasonic drive, which was fairly common in alot of compaq/toshiba machines. So a replacement be easy to find if you dont mind surgery.
As for the whole bios issue, I could have sworn these machines had a bios that was kinda gui based. I do recall it was stored on the hard drive, and could not enter bios unless it was installed on the hard disk. God its been ages, but it is not like modern computers where you press xx key to enter, with the utility being stored in bios. It was similar to how Compaq configured bioses on earlier 386/286 machines, and numerous others. Only difference was this had a gui instead of text based, which was stored on a particular sector of the hdd, and if found upon boot, the feature would be available. The bios itself yes is onboard, but the config utility rested on the hdd. Once you install the software correctly, and if the drive does indeed work, f10 to enter bios will be available...
So before you run your mouths and knock this poor guy, at least know what you are talking about please, not to be harsh. The OP is somewhat correct, as a portion of the bios does sit on the hdd, the bios config utility. When it comes to ancient dells or compaqs... LOL! I've owned/used most models through the years.
http://h18007.www1.hp.com/support/files/LTE/us/locate/3_870.html
You will need that config util. You will also have to make sure the disk partition for boot is set to active. An os need not be installed for the bios config util, but the partition must be created before installing the program if I recall correctly. Its been over 10 years since i used one... Neat machine though! Once you get it working, try to find an older 16 bit pcmcia soundcard. Only downside to these machines, and the active matrix was a bit hazy but for the day they were impressive. Talk about the first subnotebook.
:gets off soapbox: