For M1, you'll need emulation, not virtualization. Consider this:
Beware that you'd use a "x64" version of Windows 7 (I'm assuming will run under emulation, not virtualization). You should not choose the "ARM" version of Win10. LightWave needs "x64" processors. EDIT: I'm realizing that the ARM version of Win10 may have some x64 emulation possibilities within the Windows OS...but you're just asking for trouble with all these layers of systems.
There should not be a need for a license swap as modern LW licenses are dual platform.