It all depends on the school, and it could definitely be different for voice majors versus instrumental (since I know little about voice, I won’t talk about it). For true stand alone schools of music/conservatories, grades in general from what i know can only be a negative. For example, a kid who slacks off senior year and is carrying C’s and D’s may not make it into the school even if they have a good audition, in part because despite popular opinion, music performance with classes like music theory, ear training, music history and the like are not ‘crap courses’ (as opposed to many of the gen ed requirement courses they have for academic students, rocks for jocks and the like lol). Grades at a stand alone also can make the difference if they have kids on the edge of making it, the kid with better grades might get the edge on admissions. That said, though, getting a 2200 on the SAT, having a 4.0, EC’s, AP classes, etc, in the end will do very little to get you into a music program, it is better to work on getter rep up to snuff, where there isnt a tie breaker, than killing yourself academically to have all the killer stats, decent grades will be enough IMO. And good grades in high school, in instrumental music at the conservatories, won’t get you extra aid, that I am about 99.9% certain, merit aid will be based on playing ability, tempered with financial need (in other words, top students whose parents are well off likely will get nominal aid in most cases IME.
I remember at an admissions seminar at Juilliard, this one ‘determined’ mother who got up and spouted off about how her ‘talented’ son was so brilliant, and ticked off the SAT scores, the AP scores, SAT II scores, the grades, the other EC’s he did (with an attitude like Juilliard on seeing that should give the kid the keys to the school or something), and when mom asked if that would make her son a shoe in to be admitted, the admissions person smiled and said “not one bit, it all we will be how well he plays and if he is up to the standards Juilliard required”, mom deflated like a balloon in a pressure chamber (side note, the son was in the violin program, so I knew of him, he wasn’t anything that earth shattering as a violinist).
Music schools in universities are different, they do check grades and a student will need to be admitted academically as well as musically, and while music kids are not held to the same standard as academic admits, it still pays to keep the grades up and get good test scores, because as others have pointed out, music students can get academic as well as music merit aid, and academic merit is based on grades and test scores, so there it very well may pay off to be near the top of the heap. Likewise, if the kid is musically talented but wants to go to a top level academic school, having music ability with those grades can help them get admission to the Ivies and the like, and also get them extra merit aid, so if the kid isn’t certain whether he/she wants to major in music performance or may just want to continue playing, might be a good hedge to have high grades and stats as a hedge.