Lucky you!
You definitely don't want to drag-and-drop: it just won't preserve all the things you need. Please use SD!
It's likely to be returned with an empty drive with a standard OS setup on it. The easiest recovery would probably be to use the built-in Migration Assistant during the first startup to bring your stuff into the new drive.
Smart Update needs different amounts of space depending on the configuration of the drive. The User's Guide "Troubleshooting" section has some details.
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--Dave Nanian
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