iOS6 can I update to iOS 7

With the update it depends on how old it is, I am unsure of when the ipod touch 4th gen came out, but if it is too old you will be unable to update (Essentially a way for apple to con you into buying a new one). If there is no option to update in settings or in itunes when plugged into a computer then it is likely you cannot upgrade. As for the not downloading music problem I am unsure. Do you have any more information on that?