Was about to chime in on this, from what i gather from mode 1, it is completely possible to add/enhance sound effects, in the case of toy story, couldn't someone just take the original audio from the movie, edit it in audacity and then replace the sound files?
This is unrelated to audio but sega cd was supposed to be about full motion video, have we found a way to essentially do what MSU on snes can do with adding videos?