You can't just delete the "hidden files", you will have to reformat to release space on your disk. You can download Songs and then reload after reformatting.
The MR16 DOS is very simplistic and the system is designed for you to record a session, download that completed session or burn to CD and then start again with a clean (reformatted) disk.
I believe that Fostex designed the MR (MR8) to be the recorder to "front end" a computer based editing and publishing setup. The disk and then the CD burner were added on as afterthoughts. So the MR16 does not allow for such obvious operations as releasing disk space by removing deleted files.