all the muses can transform into another item. The book is no better than any other book. The reason it's expensive is because it's from the Blue Building (not everyone has the patience to get points for that shop). You can find the muse minions in different shops, like the Recycling Shop has two (Lovely and Historical I believe). Their descriptions should tell you what they transform into :)

A melody item is an item that was given out at Melody's Cottage at some point during Luminaire (December). Could be from this past year or years before!