Question: I have Included the entire E:\ drive with green check, but specifically Excluded everything else under E:\. However, there were many system and hidden files/folders that got automatically selected and were backed up.

Answer: 

When you select the entire drive (E:\ drive) for backup - by default, it also selects all hidden and system/OS files/folders which cannot be viewed normally through explorer. That is why you backed up so many.

To view all the selections made by the client, first close the endpoint application. Then bring up Windows Explorer and go to Tools: Folder Options, View:

Check "Show Hidden Files and Folders" and uncheck "Hide Protected Operating system files". Now, start the endpoint software. You will see the \SYSTEM\ folder and files that were selected.

The right way to make file selections:

Instead of selecting the whole drive and excluding everything else, it is better to directly include the file/folders you want backed up. For examnple, if you want to include C:\test\test.bak file and C:\backup folder, then from the endpoint interface, browse to the file and folder and INCLUDE them with green checksmarks. You dont have to EXCLUDE anything else. Now, when you run a backup you will see that it only scans and picks what you have selected.

* Change the Explorer Folder Options back to default after making the changes.