on musicals

Above is "Life's a Happy Song" from the Muppet movie with music & lyrics by Bret McKenzie (the beardo half of Flight of the Conchords aka NOT the sideburns dude from Flight of the Conchords) and it sounds like it. Bravo.

The problem I have with musicals is that not everything is sung. If everyone always sang then there would be a single point of suspension of belief : these people are crazy good at rhyming, improvisation and performing. Since everyone doesn't always sing then that implies it is still a difficult task requiring forethought and training.

Everything goes along like a normal day only occasionally, out of the blue someone will burst into song and then random people in the background will do a little back up singing and, of course, a bit of dancing. (not really out of the blue, it is usually at a significant event or preceding a significant event. Rarely, if ever, is there singing about eating breakfast or putting on socks)

Does this happen every day? Is that how everyone knows the words and have seemingly well practiced their synchronized dance moves? Are the back up singers/dancers paid or is there some social obligation that if someone starts singing then everyone else is expected to join in?

Are the songs made up impromptu or do they hire writers? Choreographers? Rehearse? Do they keep singing basically the same song everyday and eventually it gets better?

Sometimes, does one of the lonely background people decide to start singing and then does everyone else join in or is that reserved for certain people? Could someone jump up onto a table and start singing and dancing and then that would make everyone else believe they are part of the "star" social class?

What happens to those who can't sing or dance; are they shunned? Or when the dancing starts are they required to leave the room and hide or pretend to be a tree until the number is over?