What is the significance of the key songs and key scenes in Good Morning Vietnam? Why were they chosen?

There is a historical and thematic significance to the songs selected in Good Morning, Vietnam.

Given how Cronauer is depicted, the use of Rock and Roll music is historically significant.  Set in 1965, Cronauer wanted to feature timely music that would appeal to the tastes of the soldiers who tuned into his radio show.  For this reason, the music selected is from the mid 1960s and represents the preferences that mirror the youth of the soldiers.  For example, songs like Them's "Baby, Please Don't Go," "I Get Around" by the Beach Boys, and The Rivieras's "California Sun" all come from the mid- 1960s.  This selection of music is historically accurate because it captures the feel of the music in the time period. Cronauer appealed to a "Rock and Roll" vibe with his listeners, and so he would feature music appropriate to it.  It is for this reason that he would not play music from artists like Ray Conniff and Lawrence Welk, selections that mirror the musical taste of Lieutenant Hauk.  

The selection of music in Good Morning, Vietnam is thematically significant.  For example, when Cronauer plays Armstrong's "Wonderful World," he selects a song that aspires to what the world should be.  The condition of Vietnam presents an emotional and political contrast to the song's lyrics.  The selection of Martha and the Vandellas's "Nowhere to Hide" is another example of a song that features thematic meaning.  The song's idea of "nowhere to run" and "nowhere to hide" reflects the escalation of the Vietnam conflict that serves as a backdrop to the film.  The thematic significance of the music enhances its meaning.