No offense, but while your idea is understandable, it's also not a good solution. If you're worried about hard drive failure, you need to backup your files to a secondary drive anyways, so why limit your computing to a virtual machine, which will be inferior to your physical machine? A better solution would simply to create a simple backup script (which is easy to do...I could even get you one if you wanted), create a scheduled task and have it backup the files you wanted. Then it would be a simple process to move them to a new computer from your backups.
However, it bugs me when people ask for advice and people give their opinion without providing advice on the subject asked for, so here's my answer to your question:
1&2) I've never used VMWare's workstation virtualization software. I always use VirtualBox and have found it to be very stable, very easy to use and very good. I would try using it first, as I've had issues with VMWare's workstation software before (though I know it's very popular, I've never had much success with it).
3) As far as needing another license for Windows, if you wish to virtualize a Windows OS, you will need a license specifically for any install you do, including virtualized installs. So your host Windows 8.1 workstation has a Windows key and you will need a separate, unique Windows key for your virtualized Windows install.
4) The biggest gotcha is that your solution just really isn't the best solution for the problem you're addressing. If you have gone through and changed a bunch of settings and are afraid your settings will be lost, you might be better off simply creating a recovery image (or using something like CloneZilla to create a complete image of your machine). If you're just wanting to make sure your files will never be lost and can easily be retrieved, you would be better off with a backup script and a scheduled task.
These are the types of things I do for a living and for fun, so if you have any questions, let me know.