Yes but not with stock firmware. DD-WRT will definitely do it.

You will need to set one up as a regular access point (stock firmware would probably be OK).

The second "remote" one would need to be set up as a "client bridge"

Definitely get the GL "Linux" version since it has more memory which is better for DD-WRT.

I have this exact setup at home (one is not a GL though). I had issues getting WPA2 security working, but WPA worked fine and that was good enough for me.

There was a discussion here recently. Something to do with DD-WRT supporting MAC pass through allowing DHCP to work better/properly for multiple units behind the client bridge end.

Workgroups bit won't make any difference. If the machines work together on a LAN they will (should?) work fine.

50m should be OK if it is line of sight.