"it might also be historically demonstrable that every period rich in folk songs has been most violently stirred by Dionysian currents." This certainly seems like a fine prediction of what would happen to folk songs in the 60s and 70s, for example in Bob Dylan. I found a nice blog called "The Nietzschean Jim Morrison" here which argues that Morrison himself was influenced by N.s attitude here. (But is the Dionysian element of the "folk music" of the U.S. also to be found in folk music traditions of older tribal cultures?)
N.s point is that Archilochus introduced the folk song which is in contrast to the Apollinian and is vestigal of the marriage of the Apollinian and the Dionysian. On his view, the folk song mirrors the world "as the original melody" which then seeks a parallel dream phenomenon in poetry. (For some reason, he identifies the folk song with melody more than with rhythm: I think this would work better for European that for African cultures) The idea of course is that there is a universal melody which can be objectified in various poetic texts: it "generates the poem out of itself, ever again." We learn this, N. believes, from the dominance of the strophic poem in folk music. Wikipedia says: Strophic form (also called "verse-repeating" or chorus form) is the term applied to songs in which all verses or stanzas of the text are sung to the same music. ... The term is derived from the Greek word στροφή (strophi, meaning "turn"). It is the simplest and most durable of musical forms, extending a piece of music by repetition of a single formal section. "This may be analyzed as "A A A..."." So, for N. "the continuously generating melody scatters image sparks all around, which in their variegation, their abrupt change, their mad precipitation, manifests a power quite unknown to the epic and its steady flow." Indeed, the epic rhapsodes condemned it.
But what then is the relation between language and music in the folk song? Language plays the minor role. It is strained to "imitate music" in order to feel the power of music in itself. The history of language for the Greeks involves both the imitation of the world of image and the world of music. So, we have Homer vs. Pindar, and in between "the orgiastic flute tones of Olympus" which transported people to ecstasy. Moving up to his own time, N. notes that the listeners to Beethoven's symphonies feel compelled to use figurative speech to describe them. What he wants us to avoid is to think that a tone-poet, or Beethoven himself, when he calls a symphony "pastoral," is trying to imitate a pastoral scene: rather he is only producing "symbolical representations born of music." Only these teach us about music's Dionysian content.
So we have this imitative fulguration (flashes of lightning emitted) of music in images and concepts. This indicates for me that N. sees music as something that underlies metaphor, and perhaps also concepts themselves ultimately. One might refer to this as the pre-metaphorical moment in the creative process, if we refer back to Section 5 on Schiller. Music, then, appears as will in Schopenhauer's sense of the word. N. stresses that when it does appear as will it is "the opposite of the aesthetic, purely contemplative, and passive frame of mind." Music cannot be will since "will is the unaesthetic-in-itself": it can only appear as will. To express will in images the lyrist (lyricist) "needs all the agitations of passion, from the whisper of mere inclination to the roar of madness." So the lyrist conceives of all nature as willing and desiring. But there is an Apollinian side of this since in interpreting music as images he rests calmly in the turbulent seas of desire etc. He even sees his own self, his own unsatisfied feelings, etc. as "symbols by which he interprets music." So, in short, "he interprets music through the image of the will."
But although lyric poetry depends on the spirit of music, music does not need either image or concept. It only "endures them as accompaniments." In pure Schopenhauerean mode N. writes "Language can never adequately render the cosmic symbolism of music, because music stands in symbolic relation to the primordial contradiction and primordial pain in the heart of the primal unity." Actually, phenomena themselves are only symbols on this view, and language is only an organ of phenomena. So language cannot get at the inner heart of music.
This all seems arbitrarily unfair to poetry. Aside from the seemingly accurate view of folk-songs and the subordinate role of lyrics to music, I see the value of it as indicating that something lies beneath interpretation and language (as can be seen argued by Richard Shusterman in his critique of Richard Rorty in "Pragmatism and Cultural Poliltics: From Textualism to Somaesthetics" in his Thinking Through The Body: Essays in Somaesthetics (Cambridge U. Press, 2012).