Yes, there is a facility to buy a licence in store via windows 10. And I would encourage you to do so. It might be Microsoft deactivates all pirate copies after a while. But until then, they seem to have no issue with them being used.
To remove the old windows install after the upgrade, run Disk Clean up, and check remove old installs.
All games, files etc should be as-is after the install.
That really is all the help i'm willing to give on this issue. If it wasn't for the fact this seems to be part of microsofts plan, this would have never got answered.