Ok! Experiments over.
I went down the CDDA route to start with. The obvious advantages are being able to have CD quality music in the game, also it's easy to swap out the included track (just swap music.mp3 with anything, you don't need to redo the ISO). The HUGE downside is unfortunately needing to copy the whole game to RAM: (as you can't load from disc while the music is playing). You can do that with KOS even in the CD32's puny RAM, but you wouldn't be able to add much more content than there already is.
(includes this song
[ Show youtube player ]
Then I realised how stupid the above approach was, when we could have just had Hippo player running mods in the background, no need to copy to RAM: and you could even do this approach for the ADF release. So I redid it using Hippo player with the SOTB trilogy music as a stand in, just edit mods/music_playlist to put your own in.