I really dig the concept! It reminds me of the old Punk-o-Matic flash games which I loved! It runs a little slow on my computer, but I'm sure that could definitely get worked on!
I really like how the audience interacts based on what type of music is performed, and I found that song that makes everyone happy is Mary had a little lamb with a bit of banjo metal over the top.
The UI could definitely be improved, for example being able to see "ghost" notes of the other instruments at the same time, and maybe dedicated left click for creation and right click for deletion!