re #2...where do you see the music being sourced from? Allowing listens on shared music via user uploads would be a legal nightmare and the major APIs only provide 30 second clips.
I would go the user-upload route myself though. Just make it non-trivial for users to rip the songs to their hard drives. By the time you get a C&D (if you do), you may have enough traction to start talking to some of the labels about licensing content.