Since the S1 app only uses SMB v1 or HTTP sharing, and the S2 app uses SMB v2 or v3, you need to make sure your storage device is capable and configured for at least SMB v2.  

The S2 app now requires you to use SMB v2, so you will have to change that from V1 to V2 in order for it to work.

I believe if you have a computer and you save your playlists there, when you update to the S2 app, the playlists will be available… but again I'm not 100% positive about this.

If you upgrade S1->S2 your Sonos playlists should survive. If you factory reset everything they will be lost unless backed up beforehand (many other threads on how to do that). If they are important you should probably back them up anyway.