Possible, though this kinda bridges over to the Suggestions side of things. Anyways yes, music should and probably will become part of Dwarf Fortress later, as an activity Dwarves can engage in. Here's how I think it will work;
Facts -
* A Musician Dwarf is dedicated to elevating happiness levels by playing music on various instruments. Music skill level is trained by a Dwarf playing or 'rehearsing' music, and affects the happy thought generated. It's not very powerful, but exceptionally good music would give a fairly strong happy thought.
* A Venue is needed for a Dwarf to perform. To create a music area you must construct a bandstand or other venue, then create a room from it. When it comes time, a special 'party' is held, where a Music-trained Dwarf or one assigned to the stand steps up and plays. Dwarves may gather around and attend the session if so inclined. Alternately, music could also be played at a generic party to add another happy thought.
* A Dwarf has a chance to break his instrument if it is of poor quality/material, and also if the Dwarf playing it has poor skill.
Pros -
* Music-inclined Dwarves gain a happy thought when they hear good music.
* The playing Dwarf gets a happy thought if the instrument he's using is made of good material, or the venue is of good quality.\
* Good music may induce happy feelings of being drunk in Dwarves who hear it.
Cons -
* Music creates large amounts of noise, which may wake Dwarves up.
* Music-inclined Dwarves may gain an unhappy thought if they hear bad music.
* Bad music may cause otherwise happily drunk Dwarves to sober up.
As you can guess the last two of each are just a joke. But anyways, that's how it might work, but there are probably quite a few different ways.