I originally missed Dr. Amp's mention of red balloons "we are going to die in the streets and be bloated like red balloons", but I did speculate some time afterwards in the disappointed thread that these red balloons in some scenes alluded in a meta way to those scenes being inflated, that they could perhaps be cut, trimmed, of deflated, and this may confirm it in my eyes.
At this point it becomes clear that the clumsy way of Mr. C demanding Dougie's execution may have to do with Mr. C's unwillingness and likely fear of confronting Cooper directly, despite the menacing presence that Mr. C is, he likely has a weak point that Cooper could exploit, and Mr. C is probably aware of it.
Finally, the song. It is simply laying out the groundwork for part 17 and what is going to happen. "My dream is to go to place, where it all began, on a starry night", and this is what Cooper did, the night when Laura died. "Hold me, don't be afraid", "Under the starry night, long ago, but now it is a dream".