Yeah, interesting stuff.
It does end more or less on the main point. The diversion into all of the possible variations of digital storage/capture is sort of redundant. Perhaps interesting from a mixing perspective; the amount of sonic/tonal variation utterly enormous (though we still gravitate towards a small subset), it really doesnt represent the possible musical variation.
Just for shits and giggles; one amp with 3 band EQ and with a 10 band EQ with +/-12db per band in the loop. Pretty common situation. Assume all the controls are discrete; they can only be integer values, nowhere in between. Just in the EQs there are (10^3)x(24^10) possible combinations. About 63,000,000,000,000,000, but most of them will sound fucking horrible. (And its actually infinite within its boundary conditions anway, at the source, being analogue, though the digital capture is not).
Its human judgement and the taste of the person dialing it in that finds the way through that madness, and its the same with music.
The calculations on the possible variation of melody within one octave is more interesting. Its also interesting to me to note that within metal, jazz, classical etc melodies can and will span several octaves, which shows that people writing and listening to that sort of stuff enjoy a broader musical palette than is typically found in pop, RnB, hip hop and the like, where most melodies are written within one fifth.
But again, we gravitate toward certain things through preference.
It doesnt take into account the musical impact of use of effects. Though, is a solo played with delay the same as one without? Edge has made his musical carreer out of use of effects, and bands like Isis and Russian Circles would be radically different without it, but it doesnt change what you can write on a stave. Thats a debatable element, but its undoubtedly been used to diversify musical textures, if not the core melodies, harmonies and rhythms.
Then theres technique. You can play an arpeggio as a sweep or PIMA. Is it different, musically? Likewise, you can often play the same notes in a sweep with string skipping. Not different musically, but that kind of difference in texture/articulation/feel has been used to diversify music.
Still a matter of preference at the end of the day.
Its pretty clear that the degrees of freedom/potential variation in music and sound are absolutely vast, but the real question about whether we get to hear or make varied and new music, is how wide and varied are our tastes, and how creative are we? Thats very clearly the bottleneck.