Setting up AG Groups with Current Failover Cluster Environment

Windows: 2012 R2 Standard
SQL: SQL 2014 Enterprise Edition
Setup: Two Node Windows Failover cluster with SAN


Changes:

We want to introduce Availability Group to the instance by adding a second SQL instance running at a DR site. It will be Virtual server with attached drive. For Clarity, we will call SQL instance running on two node cluster with SAN as S1 and second SQL instance at DR site as S2

Questions:


Can we create AG groups after Adding S2 to S1 cluster? In the event of S1 failure and it failsover to Node 2, would AGs failover to S2 instance? 
Start fresh by creating two instances on new servers setup with AG and then migrate DBs to them?
Licensing - Do we have to pay licensing for both Primary and Secondary instance even though everything will be running on Primary and will failover in the event if Primary goes downs?


Thanks!
For your first question, yes you can use the same environment (Windows: 2012 R2 Standard and SQL 2014 Enterprise Edition) but the configuration should be changed. During failover clustering, primary and secondary servers shares the same resources or drives, this didn’t work for Always on configuration, and both primary and secondary replicas has to have their own drives. 

For your second question, it depends on your preference and available resources, if you think that it’s easy just to reset drives on both servers and change configuration you could do that. If you have sufficient resources, space in SAN and feels more confident to start a fresh install you might chose the second option. 

Concerning about the licensing. Assuming you are planning to use secondary node only for disaster recovery or short maintenance time, you need licensing only for a primary node. However, if you are planning to query from secondary node, you are also required a license for the secondary node too.