If you just formated it, defraging it won't do anything. If your disk have never been defraged and has data on it, defraging it should improve the speed/latency

Defrag doesn't do anything physical to the disk or anything "magical". It only moves data around to make sure files aren't fragmented. So as Deksor says, if there's nothing on the disk, it does nothing. Doing a defrag on an old drive with lots of old data on it, shouldn't hurt it in any way.

Depends a bit on what you're running, too. DOS benefits from optimizing the on-disk layout because it's so bad at caching. So, if you have a game with a crap ton of files (like Wing Commander, for e.g.), then using something like Norton Speedisk to put the directory entries in consecutive clusters can really help.

I also manually select the directories that stay at the front of the disk -- namely, my drivers and oft-used binaries. It can speed up boot times a little, depending on how much stuff you have in your config files, and how much time is I/O vs. waiting for hardware to initialize. Seems a little snappier anyway, since those old HDDs are so slow.

In a Windows 95 box, e.g., I don't worry about it so much. If you have a decent amount of RAM, it'll cache the stuff you use frequently, and you won't see any difference merely by putting the Windows and System folder contents in alphabetical order. Then again, sometimes it gives you a warm fuzzy feeling seeing all those disk blocks neatly huddled together at the top of the graph.

I think the same. I've got a 20MiB HDD here from circa 1985 that had several hick-ups initially.
At some point I had to switch the PC on/off/on during the seek/testphase, because the HDD lost track of its own.
Back then, I was worried about sending the PSU into heaven by doing that. Gratefuly, the PSU is still fine (checked via POST card).

Now, that I use the HDD more often because of several electronics experiments/projects (s. YT),
the HDD works just fine and sounds normal. I also did a lot of defragmentation using Compress and ran CheckIt! even.
Including several aggressive benchmark/surface tests (lot's of arm/actuator movement involved).
Currently, I'm using DoubleSpace on DOS 6.22 and do a dblspace /defragment ocassionally. 😀

If you're worried, let the HDD run for a while, while the PC is idle (just DOS prompt etc.) and see how the HDD is doing.
And if the sound doesn't change, just do a surface scan via scandisk. It's a soft, linear read that causes the arm with
read/write heads to move slowly from one end to the other. If nothing badly happens, just try a defrag.