Re: FM
You are quite right. Standard broadcast band FM radio has some severe limitations. The biggest is the audio frequency range. Stereo FM has L+R and L-R encoded as two separate modulations, one at the carrier, and one far above the carrier. To make sure that the L+R and L-R modulations do not overlap in the RF domain, the audio content of the L and R channels has a lowpass filter at around 15 KHz. If that filter does not roll-off quickly, high quality audio will sound "muddy".
The other problem is that standard FM radio has limited dynamic range. This is so that you do not overmodulate the carrier. FM broadcast stations handle this by compressing the audio content before it is broadcast. If you are trying to send a DVD movie's audio via FM radio, you will find that the loudest bass tones get distorted (unless you use your own compression).
These are not inherent limitations of FM modulation, but rather limitations that were imposed decades ago when allocating frequency spectrum. I guess 15 KHz sounded like a very high quality frequency limit back then!
The final problem is that, in urban areas, there are plenty of weak FM radio signals floating around from far away stations. You do not normally hear them, because the FM radio squelches them. But, if you have a local low power transmitter keeping an FM radio channel open, you can often hear the lowpower interferrors in the audio output.