#Time Machine backs up everything and restores everything.
When Time Machine backs up, it first copies all of the files exactly from your hard drive (and any other disks) to your chosen backup disk. Nothing is excluded unless explicitly specified. This answers your question concerning losing your Python modules.
After first backup, Time Machine hard links your files to another backup folder named by time and date. This means that it creates a duplicate of all of the files it created on first backup to the next backup without taking up more space. It's a lot like an alias or shortcut, but the difference between the original and a hard linked file is indistinguishable in Finder. Therefore, it efficiently changes all the files that were actually changed since first backup.
Using Command-R to bring up Disk Utility from Recovery options, formatting the disk, and restoring from Time Machine was painless and I did not lose a single file.
Since it copies all files exactly, it will transfer your "corrupt" Office files to the new drive. However, you can select Repair Disk to clear up any issues with permission errors, etc.
But, honestly, I don't think that it's worth restoring from Time Machine unless you've tried completely removing Microsoft Office for Mac 2011.