It's not my music. Actually, I get artists to submit their songs, and I pick the ones I like. Or I reach out to artists I like and ask for permission to use their songs.
No, all the phones will pull the data at a different time, so it should keep the load down from the server. Plus there is a bit of randomness thrown in for good measure.
It doesn't actually fall back to the last song. It caches the current song, but if for some reason the cache doesn't save for some reason. Or if you are offline. Your phone's default ringtone will play.