What's the Bard's College for anyway?
Well, from the http://www.imperial-library.info/content/pocket-guide-empire-first-edition-skyrim:
Founded during Skyrim's long Alessian flirtation, the Bards' College continues to flaunt a heretical streak, and its students are famous carousers, fittingly enough for their chosen trade. Students yearly invade the marketplace for week of revelry, the climix of which is the burning of "King Olaf" in effigy, possibly a now-forgotten contender in the War of Succession. Graduates have no trouble finding employment in noble households across Tamriel, including the restored Imperial Court in Cyrodiil, but many still choose to follow in the wandering footsteps of illustrious alumni such as Callisos and Morachellis.
Adding an NPC behaviour that just plays a random song is not nearly as complicated.
This is true, and we should all at least admit that Bethesda will only do these things if they considered them from the start or if they have time after the fundamentals.
Okay, but it becomes a lot more complicated when it becomes a user action. How do you control the instrument? Are there many buttons for all the notes your instrument can play? Does a console controller have enough buttons to support this? Do you simply click on the instrument and it plays a random song? Do you pick from a list of songs? Where do you learn new songs? Can you make your own songs? etc..etc..etc..
Regarding the control scheme, they could do what OoT did, where all your buttons control a note, and they could advance it by combining multiple buttons into other notes. They could use the y-axis of the anolog stick(s) to control pitch from those basic notes, again like OoT did.
EDIT: They could also use the digital pad to set the player controls to be up or down octaves, and use the x-axis to warble the note.
And if I were designing a recognition system with a simplified structure, I would design it to where 1) the player got more recognition for playing within a player-set tempo, one that was mathematically determined by the time-ratio between the first two notes (though through some tweaking of averages, it could be adjusted as time went on), and possibly 2) where the player got more recognition by playing melodic harmonics or working within the circle of fifths, something that can again be somewhat easily quantized and recognized by a ruleset. 3) The quality of instrument would further affect recognition.
There would be no set songs, the player would just play, and if they worked well within the system, they would get better default praise.