NTFS is a Widows only file system. Mac OS X can read it, but not write to it, and certainly not boot from it.
FAT32 is read/write on both platforms, but as far as I'm aware you can't boot from it.
To boot an OS X system you need to format on a Mac as GUID partition Map and Mac OS Extended (Journalled) file system (aka HFS+ (J) ).
As to whether the optical drive is repairable, without hands-on no-one can say for sure. I assume you've done the basics of cleaning the laser heads and such.