From my experience last month traveling with AV on 3 domestic flights in Colombia:

You need to book the S fare to get 1 "free" bag as Star Alliance Gold; if you book the cheapest available fare (XS) you are not eligible, so choose the fare wisely on the AV webpage.

It is possible to add-on (online) a checked bag when on a XS fare for around 10-15 USD (for domestic flights in CO). Presumably it can also be done during OLCI for a slightly higher cost.

From my experience AV doesn't seem to enforce the carry-on/hand luggage restrictions. Almost all pax had carry-on bags way larger than the small pack/personal item allowed with the cheapest XS fare (and I seriously doubt that all pax had paid for add. luggage or were traveling on a fare higher than XS).

PS: In case you are unable to complete the purchase of a ticket online/AV webpage with a credit card (payment declined) you need to call AV to complete the payment and have the ticket issued. Expect the payment process during the call to last almost an hour!

Fares tend to stay low until 1-2 days out so there is no need to buy well in advance (unless you want to travel late morning, noon or early afternoon). Even of short notice the cheap fares are available for the early morning and evening flights. It seems that FRI, SAT and SUN are busy traveling days; I would book some days out if traveling during the weekend to get a cheap fare.

To the poster above who got charged USD 75 for the second bag: There is no right to a second free bag with AV (assuming that you didn't get charged for the first) so it seems right that you were charged for the second checked bag.