First of all, you cannot buy AppleCare+ after the fact. You must purchase the warranty when you buy the iPad or you have up to 30 days from the date of purchase but you have to have the iPad inspected at an Apple Store before you can buy the warranty if you buy it after you purchas the iPad.
And secondly, Apple will replace the iPad with a new or refurbished iPad of the exact same type. In other words, if you had an iPad2, they will replace your iPad with a new or refurbished iPad2. You cannot change the version of iPad to another version when you get the replacement from Apple.