Before you go through the pain of reinstalling Windows you might want to try the MS safety scanner.
And a Defender boot time scan.
And run whatever full scan option Avast provide.
I heard music in the background, the sound of keyboard keys and a clicking mouse.
Are you sure that you didn't just have a web browser open and some video was auto-playing? Your comment implies that the microphone of the hacker's PC is being broadcast to your speakers. While I guess that's not impossible, I would think that's highly unlikely. If true, the guy's a bad hacker and you should be able to detect the malware.
Did you install anything recently?