My phone is broken. Not eligible for upgrade. Can I purchase a Verizon phone from any store (Target/Walmart)? Yes, but you will have to pay full retail price. If you purchase a phone designed for use with Verizon's prepaid plans, you will have to use it on prepaid for 6 months before you can activate it on your contract plan.
Will I have to pay for activation. Again, no. You should really only post your questions in one thread. Also if there is a problem with the phone can I bring it to a Verizon store? You will probably have to deal with Verizon over the phone, or the store you bought the device from.