Good news and bad news.
Bad news - The retail disc version for PC does not transfer the digital license over to XBox. Only digital purchases of MSFS via the MS Store / XBox Store allow for cross play of the title.
Good news - As long as you use the same account/gamertag when logging in to the XBox, your DLC content will transfer (provided that the content has been added to Series S/X).
You would need to either purchase the standard version of MSFS through the XBox / MS Store or subscribe to Game Pass to get ownership of the standard version for the Series S/X.
As far as XBox Live goes - you can use MSFS without an XBox Live subscription, but this will only give you limited multiplayer functions (weather, traffic, scenery, but not the ability to play multiplayer with other users).