How do I read data that is written in a .txt file that is located in a PC via serial.read()?
Will serial.read("C:/test.txt") work?
No.
Not unless the hard disk in your PC has a serial interface, and I have not seen one that does.
Actually, being able to plug an external hard disk with USB interface into an arduino and read from it, sounds like a useful idea. Perhaps you can invent it.
You would need to have an application on the PC which reads the contents of the file and sends it to the Arduino when it is needed. On Windows, you can use GoBetwino to do this. It would not be hard to write your own equivalent for other platforms.
I think you can use visual basic to do this. You can also use Processing, processing.org to do this as well.