It is possible, but you would need to know how to use the DSP and the ALSA mixer well. The FM-transmitter is all okay, as it sends all audio from the system.
First thing is to use the DSP: you would need to make it emit audio input from the mic as fast as possible, seems easy but might require some optimization-work. Then you would need to make the app pause, play and next and prev the media player. Then you would need to make the mic have the possibility to overlay the music player. For this you need to control the mixer. (The mediaplayer can mute all other audio output, normally.)
In short, complicated yet possible.