There is no way to use Word's TOC field, as is, to fill either of your
requirements. Heading 1 will generate a TOC 1 entry, and Heading 2 will
generate a TOC 2 entry, both with page numbers unless you specify otherwise.
I would suggest indenting the TOC 2 (this is the default) and using
distinctive font formatting (such as italic) and omitting the page numbers
from TOC 1, but that won't get around the fact that the TOC displays the
page number that is printed on the page. The best you can do is add the
"chapter" number to the page number (see
http://www.mvps.org/word/FAQs/Numbering/ChapterNumber.htm) and let the TOC
pick that up.

There is a sort of workaround that you could use if each song had no more
than three pages. You could use all the available headers/footers (First
Page, Even Page, Odd Page), start each section on an odd page, and put 1, 2,
and 3 (as plain text) in the First, Even, and Odd header/footer. Since this
would be the same for every section, you could leave Same as Previous
enabled. This wouldn't touch the page numbering, but you still wouldn't get
section numbers in the TOC; you'd get absolute page numbers, which would
bear no relation to the number on the page (though you could include the
section number, a SECTION field, with the page number on the page, neither
would be picked up by the TOC).

My advice would be to let Word generate the TOC, then unlink it
(Ctrl+Shift+F9) and finish the formatting by hand. You could insert a SEQ
field for the section numbers.

--
Suzanne S. Barnhill
Microsoft MVP (Word)