I want to add two more AE's, one at the back of the house and one at the front in the garage, both to extend my existing network and add airplay to both locations. Both locations have a decent signal from the existing AE base station.
In order for this to work correctly, both extending AirPort Express devices must be located about the same distance from the "main" AirPort Express.....and....both extending AirPort Expresses need to be closer to the "main" AirPort than they are to each other.
Apple's extend setup works on a wheel model, with hub and spokes. Think of a wheel with a hub and 4 spokes. The "main" Express is at the hub. Each extending Express is located at the end of a spoke. As such, it communicates directly to the "main" Express at the hub.....not to another Express at the end of another spoke.
Now, if an extending Expess picks up a stronger signal from another Express that is already extending, it will connect.......but it will not extend the network. The reason for this is that Apple's "extend" setup only allows the network to be extended one time, not two. You can have multiple Expresses extending the network, but each one must connect directly to the hub.
It would be tons better if you could connect both of the extending Expresses back to the "main" Express using a wired Ethernet cable connection. The reason for this is that you will lose at least half of the speed on the entire network when you try to extend using wireless. There is no speed loss when you extend using Ethernet.
If you decide to run the Ethernet cable....highly recommended for best performance....you have a minor issue in that the Express has only one LAN <--> port and you will need at least two. So, you have to add a simple 5 port Ethernet switch to the "main" Express.
Doing this wirelessly, I am under the impression I will not be able to extend my Guest Network. Is this correct?
Not correct.
When you use AirPort Utility 6.3.x and an AirPort using firmware version 7.6.3 or higher, both the "main" and "guest" works are extended. It will work as well when you extend using Ethernet. Chances are, your "main" AirPort is using firmware 7.6.4 or 7.6.5. Any new AirPort Express is probably going to be using 7.6.5.
If I cannot extend my guest network by going the wireless route, can I connect the other two AE's to open Ethernet ports on my ISP's modem/router and have my guest network extended?
No. See above for how to extend using Ethernet.
If I can extend my Guest Network by going wired, do I need anything more special than traditional Cat5 cables to do this?
No, except that you will need an Ethernet switch to connect to the "main" Express.
The longest cable run would not exceed 50ft.
Ethernet can be run up up to 300+ feet or about 100 meters with no signal loss.