What computer operating system is involved? Have you updated 12 to 12.1 using an opened project's Help Menu/Updates? If not, please do that.
For your immediate question....
You can add your own (non copied protected) music to your TImeline content, provided the music is compatible.
Have you found all the Premiere Elements 12/12.1 content? There is a lot there.
Is your music from iTunes? If so, you will probably need to take the music file into iTunes and convert it to the WAV Version before you import it into the Premiere Elements project with Premiere Elements' Expert workspace Add Media/Files and Folders/Project Assets....
Please consider. If any questions or need clarification on the above, please do not hesitate to ask.