To start with, the deadlocks are on row-level locks, not table level, so lock escalation will have no effect here. Please turn it back on.

The key, I suspect,...

The account that SQL Server is running under does not have access to your users folder. Hence the OS permission denied error

Best thing to do is to create...

No. Insert, update and delete only.

What are you trying to do?

I'd ask for a reproducable example with proper timing tests done enough times that you can tell whether the difference is statistically significant.

Drives are a small part of a modern IO subsystem. The error can be anywhere in the stack.

99% of corruption is caused by a faulty IO subsystem. Could be anything from filter drivers right down to the disk. There's a lot of moving parts in a modern...