Erased hard drive, trying to Reinstall Lion OS X... HOW? My mac wasn't loading past the boot screen (white, apple logo, spinning gear).

So I CMND + R and went to disk utilities and ran Disk Repair. It could not repair. I tried everything. Even a an fsck (or somthing like that) command repair thing in Terminal and nothing worked. 

I have everything on an external hard drive, so I just said @(*$ it and erased the drive and ran Disk Repair again and everything was fine. SMART is fine. Everything is fine. 

So now I just have to Reinstall Lion OS X. I have a Macbook Pro 13" late 2009
I can only go into the Recovery HD via the ALT/Option command at boot. 

When I go to Reinstall OS X Lion at the Recovery Utilities menu, and I enter my Apple ID it says I have never used my Apple ID in the App Store and to "Review" my account...

(P.S. I bought this mac used, so I don't have the origional Lion disk.. but from what I read, I don't need it for my version of OS X..)

Question(s):
 1) Do I need to BUY a new version of Lion in order to reinstall it?? ...If I do, how do I even access it if I can't get into the computers apps and stuff... Will it just automatically install if I buy it?

2) I downloaded Lion online from another site, to a USB, but there doesn't seem to be any way to actually install it using disk utilities... any advice??

3) Is there anything else I can do, or anything anyone else knows that I can do to Reinstall OS X... I feel like I have tried everything except buying a version from online...

--Thank you in advance for any help and sorry for my ignorance/lack of knowledge to Mac usage...
When it's telling you to review your account I think it's just telling you to go into the Apple account settings and confirm some of your account details. Probably just wants you to enter the three digital code from the back of your card, or something like that to confirm the payment details.