I had the same problem with my ipod touch 5 yesterday and its only with icloud music. Did you happen to mess with the coding of the phone by any chance? Because i added a script onto my ipod touch so that the battery indicator would show up. (ipod touch doesnt have the battery percentage) and after i restored my ipod i had the battery indicator but then my music did exactly what yours did. So i deleted all the songs off the ipod and redownloaded them all and wala. problem was solved. Instead of restoring your phone just try re downloading instead from itunes. Hope it works for you.