Your definition for "archiving" may be different from mine, but I would usually save each piece as a separate file for "archiving" purposes, and would "archive" them on data CDs.
Since you need to assemble the files you're going to burn to a CD - if that's to be your "permanent" medium - it's pretty easy to run a DOS "dir *.*/S > index.txt" of the folder you are ready to burn from, and I usually just put the index (after some editing from the DOS run) on the same disk where I put the music. (Rationale here is that if you can't read the disk it won't make much difference what's on it.) Additional information, such as source, "archive date," etc, can be added in the Index file.
For some things, I do keep a "composite" of the index files for a group of disks in one place on the machine, but none of my "archives" is extensive enough to push me to a real "master index." In a few cases where I know in advance that I'll have a series of a few disks, I may index all of the disks in that series, and put the entire "series index" on each of the disks. This is handy in that you can stick any disk from the series in the machine and find which disk has the item you really want, but has a tendency to fall apart if you come back later and add another disk or two.
If you're "archiving" a copy of a "released CD," you would probably want it as an audio CD, and you'd want to leave the track labels as on the original; but you would need some other place to keep any related info. I don't make many such "duplicates" that I consider as being for archive.
As to how long you leave the stuff on your hard drive, I can't see that this is an "archiving" matter. If you've made a suitable "archive" it shouldn't matter whether or not it's kept on your machine. Stuff on the hard drive should not be considered "archived," even though it is a relatively "safe" place to save something for reasonable periods. Whether you keep stuff there just depends on whether you might want to play with it later without going to the archive.