If I keep downloading data for several hundred stocks will this eventually bog down (fill up) my hard drive, i.e. should I buy an external hard drive to put wealthlab pro on and the stock data to backtest?

You can easily do the math when you know the file size. For instance, a typical 1-minute WL file with four years of data takes 20 Megabytes. So even 1,000 stocks would take about 20 Gigs. If the data keeps coming every day, you'll need to reserve double that amount to be safe for the next four years. And I'll bet that within these years one will get his hard drive upgraded (if not the entire rig) anyway.

Nonetheless, starting from version 5.1 it's possible to relocate Fidelity data to an external directory or drive. See Data > Data Manager > Symbol Management > Relocate data in the Wealth-Lab User Guide.

Another way (note: unspported) to achieve the objective is to use symlinks as described in the FAQ:

Can I relocate the whole "Data" folder (or only some subfolder) of my Wealth-Lab 6 from C: to a different drive or directory?