Let's clear a few things up here. Fat does not turn to muscle in anyway shape or form. It does not happen, that is a myth in the gym. The muscle you build the more fat it will burn naturally.

If you want abs then the only way to achieve them is diet and exercise. Doing crunches and sit-ups will do nothing if you fat intake is to great. This is another myth of the gym that all you have to do is crunches and what not to have abs. Your diet is 90% of what you accomplish in the gym. If your diet is not in check neither will your gains.

There is also no way to spot reduce fat, you can't just target a specific area like your waist. Between diet and cardio the weight will drop in time. Some people hold a majority of there fat in there waist/stomach area.

This is not a bodybuilding site so the answers you are looking for will not be found here. Go to a bodybuilding site and you will learn alot more if you are serious. There is plenty of information on the web, just read up.