I know for a fact I don't need to reinstall Ubuntu from an external source to do a 'factory reset' since I did it by mistake once, my Netbook crashed and then just went through the process
That smells like a recovery partition. If you want to make sure: fire up gparted and have a look at the partition lay-out.
This has not really anything to do with Ubuntu/Linux but more how computers work and are set up.
If the manufacturer of the system created this they set up a bootable partition that holds an installation setup of Ubuntu 12.04. And you can start this by selecting the partition from the boot options from within your BIOS. Often these installs include system specific drivers and software for your system incorporated into the installation.
A bootable recovery partition will be booted when the system does not find a valid other boot option so that is probably what happend when your system crashed. And yes, this will format the disk, removing any file you stored. You are supposed to make regular backups in case something this happens.
There probably also will be a function key you can press during the boot process (before grub is started) to start the recovery.
Mind though that it would be smart to overwrite this partition with a new Ubuntu before 12.04 goes end of life or you might end up with half an install (only the install from the partition and not the mandatory update from the repositories you need to start after the install). Refreshing this partition with a 16.04 (or soon 18.04) version would extend the time frame before that goes end of life. If the partition holds a specific tailored installation you might need to download it from the manufacturer to also include the extras from their version. If there is not one this is not too much of a problem: find out what those packages are and you just need to install them yourself.