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I don't think it will make a difference which logical drive you store your music on. The only situation it would make a difference would be if you were going to be accessing lots of tiny files across your logical partitions. Music files aren't tiny and don't require lots of IOPS to playback from.
I'd keep your OS on C and music on D. Keep in mind that if your physical disk fails, you have no added redundancy from having data split across partitions. Keep a backup on a 2nd device for safety.
One physical disk. My limited understanding is that C should be used for doing stuff and D for storage
Steam is unplayably slow. Hoping removing of duplicates would speed that up.