My Intel processor has a serial number. This is switched on or off at the bios level at startup. See here.

I don't know if Microsoft tracks over the internet for multiple installations, but I do know for a fact that Office checks the local network in my house to make damn sure only one person is using the same installation at a time, and won't allow a second person to load it if one person is using it elsewhere on the network. Fortunately, the new Mac student version for my kids permits three loadings at the same location.

It's all very fine to be paranoid about Microsoft, but if you try to stay out of the upgrade loop, you're going to wind up with serious holes in your security. If that's how you feel, maybe Windows isn't where you want to be, and that's certainly a legitimate solution.