1st Generation Apple TV Menu Screen Flickering

I assume the HD is at the end of its life, am I correct?

14 years is a long time. Most mechanical hard drives fail long before that age. But it depends on use. Few writing and deleting operations may extend the expected lifetime. But there may be other issues as well. The flickering may have a different cause.

If so, is it easy to change over the HD or does it have the OS on it and cannot be simply switched over.

The HDD does have the OS on it. I doubt you’ll find the adventurous modifiers here. Try searching for Apple TV 1st Generation Hard Drive Replacement.

I love my Apple TV as I can put movies from iTunes onto it regardless of where it was purchased. I often Rip movies from DVD an put them on my Apple TV.

The ‘modern’ way is to stream local files from a Mac or PC using Apple Home Sharing or similar third party solutions.