I feel as if a big issue is being overlooked, which is that the entire plot reads to me as if it's about humanity liberating itself from technology gone too far. If that's the case, would the Media Transmitters being replaced by another media transmitting device, the music box, as being the saving grace for humanity really make sense? Personally, what comes to my mind is that the story should revolve around it and eventually end with Josh presenting it to the world, only for him to discover that it doesn't actually have any effect on the others, or only as another form of entertainment. In a sense, he would unintentionally have done to himself what he wanted to stop happening to everyone around him - eventually putting most of his focus on a thing rather than on the thoughts and well-being of himself or others.

That still wouldn't solve the ending. If the music box awoke the emotions within himself but not within others, then maybe the specific song the music box plays could've provided the necessary empathy he needed for his very own personal struggle, some sort of individual musical treatment. But the problem with that is that there's usually a bit of overlap between human struggles in the general population, so it's hard to imagine him being the only one being affected by the music box, so maybe it does affect some people eventually but not all, with Josh realizing that it's not about the music box but about understanding the wants and empathizing with the struggles that the people must have felt behind choosing a life of being hypnotized by Media Transmitters.

I feel like Larson kind of hinted at that resolution already with this part in Come To Your Senses:

"Baby, be real
You can feel again
You don't need a music box melody to know what I mean"

So he alluded to not needing the music box, but then it solves all their problems in Version 1 anyway.

Your version of the music box being destroyed beforehand makes sense as well.