Whenever the magus enhances his weapon using his arcane pool, he may spend 1 additional point from his arcane pool to add the bane special ability to the weapon.
So I use the standard 1 point to enhance my weapon via my Arcane Pool, and with this magus arcana I can spend an additional point to also add Bane to my weapon, along with the ordinary enhancement.
The fact that it says bane is added to the weapon, rather than to the list of available weapon enhancements (compared the wording to the magus arcana Ghost Blade ("Whenever the magus enchants his weapon using his arcane pool, he may spend 1 additional point from his arcane pool to add the brilliant energy and ghost touch special abilities to the list of available options,") leads me to conclude that it's meant to be an additional property, rather than an additional option.
Does this sound right?
Yep.
And just to verify, since I've never used bane in 3.5, let alone Pathfinder, the available options for bane targets are basically the ranger's favored enemy list?