If you currently have static html pages and want to change your site to use WordPress you can reference external pages from within WP, but you will not gain anything from that setup. To make your pages searchable from within your WP site they would need to be changed to pages or posts manually. I changed a static html site to WP about a year ago and it really took off, but it was a small site with about 35 pages and took a month to convert page by page. It was not the only thing I was doing at the time or it would have been done sooner, but it does take time to manually convert pages, especially if they are not already in xhtml format using utf-8.
WordPress can be installed in your site's root directory but it can also be installed in its own directory on an existing domain, just a little more adjustment for existing links that way. Basically it all depends on how you want to use WP and what you want the finished structure of your site to be. If you are not familiar with WordPress I recommend setting up a free account at wordpress.com to learn more about how it works and what it can do for you. Their free sites are only for non-commercial personal sites, but whatever you create there can be exported for integration with your own install when you're ready.