Went on to is normally used when discussing a direct progression, often as part of a career. A example would be "At the time the Governor of California was Ronald Regan, who went on to be President of the USA". In this case there was a direct relationship between being elected Governor and being elected President and the whole sentence refers to Reagan's political career. Also there was very little time between his being Governor and becoming President.
However if someone was writing a biography of actress Diana Lynn they might write "In 1951 Diana made Bedtime for Bonzo with Ronald Regan, who would later go on to be President of the United States". In this case the main subject is neither Regan nor politics; there is no direct relationship between his appearence in the film and his becoming President and the event being discussed was a long time before the presidential election. Any one of these conditions is sufficient reason to use the would later go on form.