What exactly is this Direct X 11 and what will it do?

[Bishop81]

loading would probably be faster because it takes far longer to read small files from a HDD than it does bigger files.

Firstly, that makes no sense.

Yes, it's slower to read many small files scattered all over the disk then one large file that is properly defragmented. But if we increase the texture res, it would just mean the "many small files scattered all over the disc" becomes "many large files scattered all over the disc".

Secondly, it's highly likely that SE pack textures together - i.e. all the textures that need to be loaded together are in one file.