Yeah, a clapping along anim or something for the crowd might help.
I don't know enough about medieval hat design to comment, but in any case it's not as if we're going for the highest level of realism here and it looks cool - and if anyone would get to wear a hat that silly, entertainer feels like be a good bet. Certainly I think one could link it to e.g. jesters wearing bright colours and motley. Lutes generally aren't strummed AFAIK, but the style I've usually seen them played in is finger-picking which would be invisible on this scale, so I agree with the choice to make it a strumming anim.