It doesn't sound like they were there to pay their respects to the deceased....some people have "0" class.
Not necessarily - the song may have been played by the family in order to recall happy memories for the audience about their time with the departed in this life. Their reaction could have been very personal recollections of a fun event they all had together. The most recent memorial service I attended included many laughs and happy stories of how lives were touched by the one being remembered. There were tears because none of us would have those times again but the memories were sweet and that's how people live on through the lives they have touched.