You can do what you want using Formidable hooks but not by directly editing a lookup's dropdown. A standard dropdown gives you the option to "Add Other". This opens a text field if "Other" is the selected option. Lookup tables don't have this feature, but it doesn't mean you can't simulate it. You can use the frm_setup_new_fields_vars and frm_setup_edit_fields_vars filters to add an "Other" option to the lookup field before it is rendered on the page. Then, if "Other" is selected, conditionally open a text field to add the new musician's name. For the last step, use the frm_after_create_entry hook to add the new value to the lookup table.

I typically add the feeder form into a popup accessible via a button in the page or via a menu item. You'll then want to limit the forms access to admins or whatever is appropriate at the form settings level. https://formidableforms.com/knowledgebase/general-form-settings/#kb-form-permissions

Thanks !   Ill look at you guys suggestion soon and report back.