Ok, after speaking with a VMware rep I think I finally have it figured out now.
The vCenter server Foundation will allow me to create my cluster of 2 hosts (max 3).
Each ESXi host must be licensed, BUT you can use the free 60-day license, indefinitely, with HA and vMotion working, as long as you renew it every 60 days manually.
OR
You can skip the manual free re-licensing and purchase licenses so you never have to worry about it.
Now I know why it's so confusing - VMware wants to make money from people purchasing the licenses, as opposed to you doing it for free every 60 days. If what I wrote above was written ANYWHERE on the VMware site, I would have known exactly what to do without wasting, literally, 3-4 days scouring the internet looking for the answer.