It would make otherwise lifeless Taverns a bit more alive. I was hoping to be a heavy metal minstrel that would travel to some of the wildest gigs across Skyrim. Do you think more people would travel to Taverns instead of going home afterwork if there were more dancing and live bands. Hell throw in some sort of festivals with more food and drink

Heh, who knows. They add tons of little cool tricks like that everytime.

Would love it too.

Brilliant idea!!
I just remembered that I liked music instruments on many different games!!!

I think the best would be if both npcs and the player's character can play them.

NPC's playing music adds realism and immersion and creates a good atmosphere.
I've left my character at S.T.A.L.K.E.R stand by a campfire surrounded by npcs playing guitars for several minutes,just to listen the different tunes they played.
[media]http://www.youtube.com/watch?v=BrCl5j10z6A[/media]

As about interactive organs that the player's character can use,I'd really hope if they where there,they wouldn't be just gimmics but gameplay elements.
Maybe in a kind of way Zelda series handles musical instruments.
That be,there are several songs the character can learn,and each song has a magic effect on something.
E.g. changing the weather,healing,activating sound-based mechanisms etc... That would be a very interesting feature I believe!
[media]http://www.youtube.com/watch?v=CCGn-2krPX4[/media]

Seem to remember in one of the Elric novels there was a guy playing the skirling pipes no idea what exactly they are but would still love to hear a drunken Nord playing a set

it would be a nice way to chill.. just imagine you go off on a quest to retrieve a stolen music book practicing for an upcoming festival celebration and if you get the song right on the day of the festival you get some sort of perk/enchantment...