This skill can be raised above a level of GM up to 120 through the use of power scrolls.
Musicianship itself has little use without one of the other bardic skills. Used in conjunction with Discordance, Peacemaking, and Provocation, your musicianship will decide if you fail before even attempting the skills.
It is always recommend to train any skill from an appropriate NPC before attempting to master it. For bardic training seek out your cities local conservatory of music.
Once you have attained a novice level of skill in Musicianship simply playing any instrument will give you a chance to enhance your skill. Local bards would love to provide eager musicians with new instruments. Be forewarned, each instrument has a limited number of uses. No bard worth their songs would be caught without a few backups.
One of the easiest skills in UO to macro, simply set your instrument type to use on repeat and make sure you have a large number on hand, as they will break with use.