Hey there!
Quote: I dragged dll files from original amnesia's folder to updated amnesia's folder
This part here concerns me a bit! You should install the updated Amnesia 1.3.1 files in the same location as your old version, and it will take care of the rest. You have an error which said this:
D:/Program Files/Amnesia - The Dark Descent/redist/Amnesia - The Dark Descent/Amnesia.exe
It shouldn't have that second "Amnesia - The Dark Descent" folder! All of the files and things are already in the redist folder.
You may need to do a full reinstall of the original game, but while you are reinstalling it (you seem to have a retail copy), you should have an option to select what directory to install to in the installer. Copy the directory path you are installing to (and you can paste that in a text editor if you need to), and then when installing the 1.3.1 update, make sure both the path in the 1.3.1 installer and the one you copied are the same. Then everything should be okay.