I fully expect Apple to deliver on these ambitious numbers. I've been saying for some time I'm expecting the likes of Spotify and Rdio to become also-rans in a relatively short space of time. They cannot compete with Apple.
You're probably right. The main thing is this solution will almost definitely be built right into the Music app. Many people (me included) would just use iTunes Radio if it didn't suck so bad. If this new streaming service works better than Spotify or Pandora, I'll switch immediately. I especially like the idea of human curated lists. It's amazing what a difference that makes.