Suppose that I have a set-valued sheaf $S$ on a site $(\mathcal C, J)$.
Question 1.) Is there a canonical way to turn $S$ into a sheaf with Abelian group values?
I considered the following: for each object $U$ of $\mathcal C$, one can take the free $\mathbb Z$-module, generated by the set $S(u)$, and define the restriction maps on the generators via the restriction maps of $S$. Generally, this will only result in a presheaf, so one applies a sheaffication process.
Question 2.) What would be a sufficient condition on $S$ to ensure that this presheaf is actually a sheaf? I was not able to come up with one myself.
My motivation: I would like to compute the sheaf cohomology of a set-valued sheaf.
Fix a site. Let $\textbf{Psh}$, $\textbf{Sh}$, $\textbf{AbPsh}$, and $\textbf{AbSh}$ be the categories of presheaves/sheaves of sets/abelian groups. We have a commutative diagram of forgetful functors: $$\require{AMScd} \begin{CD} \textbf{AbSh} @>>> \textbf{Sh} \\ @VVV @VVV \\ \textbf{AbPsh} @>>> \textbf{Psh} \end{CD}$$ All of these functors have left adjoints, so if there is anything that deserves to be called the "canonical" sheaf of abelian groups associated with a sheaf of sets, it should be the left adjoint functor $\textbf{Sh} \to \textbf{AbSh}$. It can be computed as you say:
Proposition. The left adjoint functor $\textbf{Sh} \to \textbf{AbSh}$ is isomorphic to the composite $\textbf{Sh} \to \textbf{Psh} \to \textbf{AbPsh} \to \textbf{AbSh}$.
Proof. Let $S$ be a sheaf of sets and let $A$ be a sheaf of abelian groups. Then: $$\begin{align} \textbf{Sh} (S, A) & \cong \textbf{Psh} (S, A) \\ & \cong \textbf{AbPsh} (\mathbb{Z} S, A) \\ & \cong \textbf{AbSh} ((\mathbb{Z} S)^{\sim}, A) \end{align}$$ Here, we have used the fact that $\textbf{Sh} \hookrightarrow \textbf{Psh}$ is fully faithful, $\mathbb{Z} S$ is the result of applying the left adjoint functor $\textbf{Psh} \to \textbf{AbPsh}$ to $S$ (considered as a presheaf), and $(\mathbb{Z} S)^{\sim}$ is the result of applying the left adjoint functor $\textbf{AbPsh} \to \textbf{AbSh}$. ◼
For completeness, let me note that left adjoint functor $\textbf{Psh} \to \textbf{AbPsh}$ is indeed computed by applying the free abelian group functor componentwise, and that the left adjoint functor $\textbf{AbPsh} \to \textbf{AbSh}$ is "the same" as the left adjoint functor $\textbf{Psh} \to \textbf{Sh}$, if you handwave where the abelian group structure comes from. (To prove this rigorously you need the fact that $\textbf{Psh} \to \textbf{Sh}$ preserves finitary products.)
I think there are no reasonable conditions that ensure that the presheaf $\mathbb{Z} S$ is automatically a sheaf. For one thing, in the case $S = 1$, this amounts to asking for conditions for the constant presheaf $\mathbb{Z}$ to be a sheaf. This never happens when the site contains an empty object. I think a sufficient condition would be for the site to consist of only connected objects, i.e. no representable sheaf is initial, nor a coproduct of two or more representable sheaves.