I'm not an audio guy, so I can't comment on how well it would suit that scenario, but it sounds like a neat pipeline, and I'd love to hear about it if you end up building it.
The main idea was for GM's to use mood music to set the tone or for audio effects the classic red alert should for a sf based game.
What I wanted it for was real time voice changing for character voices - basically the flanged goa'uld or the glados formant shifting robot voice or the classic Dalek voice