They only store a catalog of the most popular songs. (Where 'most popular' is determined by your geographical location). This catalog is periodically updated.
Isn't the use case to find obscure music? Weird to have just popular ones. To "discover" a top 10 hit I can just ask someone nearby.
Not necessarily. Everything is "obscure" to you the first time you hear it.
I think the Pareto principal kicks in hard here. If it stores the top 20,000 songs as the other comments suggest then I expect that would include the vast majority of music you’d come across.