Min no. of replicas to set up SQL Server Always ON over a Failover Cluster on a Windows Cluster
If by AlwaysOn you mean "Availability Groups" (which is typically the case), then you can most definitely use your failover cluster instance as a replica.

For this to be an Availability Groups design that is actually useful in the sense of AGs, then you would most likely want another server to host another replica in the Availability Group (for whatever it is that you're looking for:  HA, DR, reporting, etc.).  All of the servers that are going to be participating in the Availability Group need to reside in the same WSFC.


  There is no point in having AO when only 1 instance of SQL is running at a given time


The replicas in an Availability Group are individual SQL Server instances (whether it be a FCI or standalone instance), so each of the replicas are "running" in a normal condition.


  what would I need to set up AO?


Technically speaking?  You would just need another instance of SQL Server to have as an additional replica for the AG.

Realistically speaking?  We can't answer that right now with the current state of the question.  We'd need to know exactly what you want your Availability Group for.