This is more troublesome and not what we usually deal with. Injecting, modding and otherwise fiddling with SSEQ audio (the tracker type audio format for the DS) is easy enough but that is a different game entirely. MP3 to midi does not exist in any form that I know of outside of some interesting abuses of digital signal processing and tracker formats far more advanced than the DS has so that is not going to happen. If you do have a midi version of that track go with that.
The SDAT spec does allow for a PCM audio type playback (see some of the early tony hawks games- they have full tracks) and indeed it is probably used in the game and has a measure of support at hardware level. What I am not sure about is changing the audio type being played back (concerns with resource use if nothing else) and how you might change that sort of thing. Replacing like with like or repointing to it is easy enough but I have not really considered replacing it with something else-
I imagine you would have to first convert it which is fine but then alter the header to change the file type otherwise it might try to play back your STRM file as a SSEQ file (the SDAT format/player is fairly resilient which is nice for hackers but this would be pushing it).
The trouble comes in the format listing goes in order of the type (formats are not all mixed together- first SSEQ, then seqarc, then bank...... and you are replacing one file of a format with an entirely different one)- whether something creative like changing the file ID/ordinal which do differ between files and maybe abusing the file data (in there with the entry name) to match the required levels (each file type has specific info like use this volume, this bank, this priority, this seq arc and so on and obviously each format has different requirements- STRM obviously does not need a BANK) if not would work is something you need to test.
As far as I know (and this is going off inferences from previous hacks rather than any actual ASM level work) the game just passes a request to the SDAT component saying play track no ? which does hold between types. At this point though you are relying on the SDAT player to be relatively intelligent and parse the file as it now is rather than expecting file count to up once every time and that is not the best thing to rely on in rom hacking (see the file doing things like wasting bytes in file options/requirements for formats that do not need it- rarely a sign of a really well coded format and seen as every file should do things in order there is little call for a proper parser). On the other hand we did used to outright replace SDAT files with others (the first goldeneye game) to make roms smaller and odd things happened there (castlevania would have a gunshot sound when you cracked your whip) so there is hope.
After this you would have the redoing of the file itself but that is easy enough too (make sure all relevant pointers are changed if you add stuff) and has been covered in the past (change header values for entire file length, change size of File Block in main SDAT header, change size of file block in the file block's actual header..... personally I would use destructive editing methods).
Other games that you might have seen hacks like this for (thinking electroplankton, N+ and the world ends with you) tend to opt for wave files or some minor variation/existing format which is what you might have seen in the past and such things make audio replacement a doddle compared to the SDAT format.
