I stepped back and looked at this idea from the perspective of a teacher using it in a classroom because, well, I will be using it once it is complete and I don't want to think "Oh, I should have done that differently." I decided to change the design and functionality in the following ways:

1. The remote will be a small 15 key keyboard. This is by far the most natural arrangement since myself and the other teachers are used to playing piano. I will likely design and build the keyboard remote myself unless I come across one that is just right.
2. It will not play a collection of songs. Although this sounds like a nice feature, it would not be very useful. It is vastly simpler to just play the song on the keyboard remote rather than select the song, set the tempo and try to play back the parts of the song they are currently learning.
3. There will be no display. The only real use for the display was selecting songs and setting tempo. Without that functionality, the display just adds needless complexity, cost and power drain.
4. The control interface on the main unit will consist of: a power switch, a volume knob, and perhaps two buttons for recording and playback, though I'm still thinking about that function.

Here is an updated schematic

And here's an updated basic diagram