Instruments should be made to allow players using the 1,....8 buttons to play notes separately, and by using ctrl shift alft to switch between octaves, so players can create their own music bands.
There is a similar system in LOTRO, and it works like a charm, it's really suggested that you implement a system like this, it would create a hell of a lot fun.
I'm sure there are at least 8 buttons on an XBOX controller, in case your point is gonna be that, there you have it.
Left clicking it would start playing without any sound, but by pressing buttons 1-8 should give off sound according to the actual note, with modifier buttons changing octaves, and by adjusting press length, the actual note length could be modified too.
There should also be a possibility to use chat commands somethnig like "/play [number sequence]" to allow players who are not that musical to play premade songs copied and pasted from a topic in the forums.
And this takes me to my next point:
There should be a forum Topic, or Wikipedia page, where players can store and create strings that you can play in game in case you're bad at playing actual instruments (like I am).
It should be simple enough so anyone on an Xbox can play it just by reading it (including modifiers, like s3 meaning shift+3, c5 meaning ctrl+5, and a1 meaning alt+1) so they can use the corresponding modifier buttons to play the same note as someone on a PC would.
I'll just leave a video here showing off what I suggest so you can have a look at it.
I don't think implementing a couple of sounds and key mapping them to buttons is that hard to do, the question remains if you actually wanna spend resources on this project.
I hope we'll see it in the game at some point.
Sail Well Mateys