Regarding sound production:
The introduction of energy to an instrument - the attack phase - usually creates energy at many different frequencies that are not related to one another by simply integer multiples. In other words, for the brief period after we strike, blow into, pluck, or otherwise cause an instrument to start making sound, the impact itself has a rather noisy quality that is not especially musical - more like the sound of a hammer hitting a piece of wood, say, than like a hammer hitting a bell or a piano string, or like the sound of wind rushing through a tube. Following the attack is a more stable phase in which the musical tone takes on the orderly pattern of overtone frequencies as the metal or wood (or other material) that the instrument is made of starts to resonate. This middle part of a musical tone is referred to as the steady state - in most instances the overtone profile is relatively stable while the sound emanates from the instrument during this time.
After Schaeffer edited out the attack of orchestral instrument recordings, he played back the tape and found that it was nearly impossible for most people to identify the instrument that was playing. Without the attack, pianos and bells sounded remarkably unlike pianos and bells, and remarkably similar to one another. If you splice the attack of one instrument onto the steady state, or body, from another, you get varied results. In some cases, you hear an ambiguous hybrid instrument that sounds more like the instrument that the attack came from than the one the steady state came from. Michelle Castellengo and others have discovered that you can create entirely new instruments this way; for example, splicing a violin bow sound onto a flute tone creates a sound that strongly resembles a hurdy-gurdy street organ. These experiments showed the importance of the attack.
Regarding sound identification/discernment:
One case of auditory grouping is the way that the many different sounds emanating from a single musical instrument cohere into a percept of a single instrument. We don't hear the individual harmonics of an oboe or of a trumpet, we hear an oboe or we hear a trumpet. This is all the more remarkable if you imagine an oboe and a trumpet playing at the same time. Our brains are capable of analyzing the dozens of different frequencies reaching our ears, and putting them together in just the right way. We don't have the impression of dozens of disembodied harmonics, nor do we hear just a single hybrid instrument. Rather, our brains construct for us separate mental images of the two of them playing together - the basis for our appreciation of timbral combinations in music. This is what Pierce was talking about when he marveled at the timbres of rock music - the sounds that an electric bass and an electric guitar made when the were playing together - two instruments perfectly distinguishable from one another, and yet simultaneously creating a new sonic combination that can be heard, discussed, and remembered.
Regarding the function of the auditory system:
Imagine that you stretch a pillowcase tightly across the opening of a bucket, and different people throw Ping-Pong balls at it from different distances. Each person can throw as many Ping-Pong balls as he likes, and as often as he likes. Your job is to figure out, just by looking at how the pillowcase moves up and down, how many people there are, who they are, and whether they are walking toward you, away from you, or are standing still. This is analogous to what the auditory system has to contend with in making identifications of auditory objects in the world, using only the movement of the eardrum as a guide.
Regarding emotions in music:
Composers imbue music with emotien by knowing what our expectations are ande then very deliberately controlling when those expectations will be met, and when they won't. The thrills, chills, and tears we experience from music are the result of having our expectations artfully manipulated by a skilled composer and the musicians who interpret that music.