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Herein, what does way leads on to way mean?
If you look at it from that perspecitve "way leads on to way" means that one choice we make leads to a set of other choices and events and, really, there is no going back to make the same choice again.
Likewise, how do you lead a two way?
Lines 14-15 Yet knowing how way leads on to way, I doubted if I should ever come back. The speaker realizes that his hopes to come back and try the other path may be foolish. He knows how "way leads on to way" – how one road can lead to another, and then another, until you end up very far from where you started.
"Both the morning equally lay" refers to both paths. They are (almost) equal in the eyes of the speaker. Nothing much differentiates them aside from that one is less traveled than the other, simply meaning that less people have walked upon it.