Pagefile.sys is the “paging file”, or system file, that contains Windows’ virtual memory. You can remove it — if you understand the ramifications.
Disk fragmentation can adversely impact overall system performance. Defragmenting your hard disk periodically can help. Even better, Windows may already be doing it for you.
How much a swap file gets used depends on how much RAM your computer has, and what’s running on it at any given time. Knowing that will also help you decide where to place the file.