The music problem is a legendary with mugen. There really is no way to fix it unfortunately. You could try getting different plugins and using sound files other than mp3s. Ogg files are supposed to work better specifically.
If you put a character in a space designated for hidden characters, then that character won't appear on your select screen. Sometimes that means you can move your cursor off the screen to select them and sometimes it means you can't get them at all, except with randomselect. They can still show up as CPU in arcade mode though. Thats why its good for boss characters.
Hope this helps