Well, you can use any MIDI editor of your choice that supports .DLS files, but FL Studio has a lot of features as well as plugin support. As for extracting, replacing and playing, it's not as simple. Not all songs are made the same way. That's why if you replace songs with another, it won't sound right. If you're lucky, it might, but it depends. It will usually require some kind of effort to get your music just right.
And if you want to replace those songs you listed, you will need MIDI versions. You cannot use MP3s. And I cannot stress that enough.
Does it still give you a .sseq file?
Yeah. That's why I recommend using the new one. Try re-exporting your original MIDI and try looping it again. Be sure you're using the proper commands too.
I tried looping it and had no problems at all. All I did was add the loop information. Are you sure you're adding the loop information correctly?
When in FL studio, there is an option to change the patch of the instrument when in the keyboard view. That's where you can toggle instruments on a track. As for DLS files, they contain the game's sound samples, and if you don't have them, you'd better have a good memory. The DLS files extracted vary from game to game as well.
CT2 is buggy in the fact that it cannot replace a file if it's larger than what the target is. Even if it's just one byte, it will complain that it cannot insert it because it's too large. I'd use PPRE mostly because it rips the rom apart, then reassembles it, regardless of any size limitations.