I go to [My Computer - Right Click HD - Properties - Tools - Check Now, and it gives me 2 options to tick, (Option 1. Automatically Fix System Errors, or Option 2. Scan for and attempt recovery of bad sectors.) Is there a difference between the command line version and doing it this way?
The second option is equal to the /r (read, fix and repair) option of the commandline.
Option 1 is just a 'logical' check, not read of the data directly which makes it a lot faster. It depends on what you need: just a check if you did something wrong, or an 'archival check' where you want to know if everything is ok.
The commandline gives more options, and somewhat more progress info (good for large disks).
That it takes long is normal, just calculate: reading 1TB with 25MB/s takes about 11 hours.
Also, what causes the hard drives to start having problems or failing. Is it just the hard drive getting old, improper shut down, what?
Both, although improper shutdown these days gives mostly logical errors when you where writing to the disk at that time.
Disks are rated for a certain number of power cycles and errors overtime, cheaper (and hence most 'desktop/consumer' disks) are 3 to 5 year 'normal use' still.
It all depends on the design and intended purpose of the disk, no one answer to this then to look at the technical specs.