1. Mostly purchased or free from itch.io
2. Yes.
3. It doesn't make sense for free or paid games.
4. Yes.
5. Unity
You're over-estimating the value of music in games. A lot of people simply turn it off or never turn it on. On your model the person would pay a license fee for a song that was switched on, and that the player immediately turned off. Monitoring and collecting your money would be a nightmare.