That's definitely a lot of questions....so let's begin:

Explosions/rockets can be done in a variety of ways - from simple overlays, to complex cgi type stuff. I'll leave that to someone else to explain in better detail than I.

Editing frames is pretty simple. The way I do it (in Sony Vegas), is to capture/save the frame, and then open it in PaintShop. Then I insert it where I want to replace the frame (either by just overlaying on the track above, or by snipping out the old frame, and putting the new one in the gap).

Now, the tricky bit - The music. The simple answer to your question is No. You could just lower the volume of the original music/sfx track, and have a second track with the new music. BUT, that sometimes sounds crappy.

Or, you could get rid of the old music/sfx track, put the new music on a new track, and then insert appropriate sound effects (on another track) that matches what was there originally.