What do I use as the encryption key and initialization vector in AES cfb128
You can use your HardwareID as basis for the encryption key. If the ID provides enough entropy it'll work. However, if anyone can somehow obtain the ID (which might be quite easy to do) one can decrypt the file.

For CFB-Mode the IV must indeed be unpredictable (but need not be secret), so random is just fine, but DO NOT REUSE AN IV.

Encryption large amounts of data with the same key and different IVs is just fine and no problem at all. 



However, I want to propose some improvements for the security level.


Don't use CFB-Mode but EAX/CCM/GCM-Mode, as they are authenticated and hence you've authentication "for free" without any further worries.
As replacement for the Hardware-ID based Key I'd suggest either storing the key (plain - not recommended) on the USB-Stick, or only use a password (+ scrypt) or store the key encrypted (AES-GCM+scrypt) on a stick.
You might want to consider generating a key for each file you encrypt and storing this key (+IV) as a "header" for the encrypted file. The header would be decrypted using the secret key (from USB / from password / from USB+password)