Domains and email accounts - OFFice 365

Hi all


Apologies for being dumb here, but I'd like to understand how the domains work.

So I have just bought a domain on Go Daddy, and I intend to set up an Office 365 account to work from. I'd like the 365 account to have as the main email/login. When I go into 365 it talks about adding a domain and verifying - this all makes sense. However, I then get asked about adding users and this is where I need help. If I were to add a user, it would be giving me the option to have where will this sit? I want it to be a workable email for my Outlook online and application...but will I get charged through GoDaddy for this, or does it fall under my E3 licence in 365? 

In other words: do I need to setup the accounts on GoDaddy as well as 365, or just 365 and it does the work for me?


Thanks in advance