Depending on which country you were in there were a number of different types of "bards". Troubadors/trouveres in Provence/Northern France respectively, Minnesingers in the Teutonic states, court bards in England, harpers in Wales. All of them collected songs and ballads. The royalty would have been more interested in romantic songs of knights and ladies (courtly love), or epics about battles, or songs flattering the royalty themselves, all of which these singers knew a number of. These were not necessarily wandering minstrels, who were known in France at least as jongleurs; usually they were aristocrats themselves or supported and were supported by the aristocracy, mainly staying in service to one house. The situation in Wales and the other celtic countries was a bit different, and I don't know enough about it to elaborate further.

As far as art music, there was a really interesting school called Ars Subtilior. These were largely secular songs and did some things that were not to be repeated until the 20th century---very dissonant sounds for the time, ignoring the rules of polyphony and the rhythmic modes/isorhythms. Again, I don't want to get too technical. They also used graphic scores for the first time---love songs sung from a sheet of music where the staff was heart shaped, for example (Belle, bonne, sage by Baude Cordier). Opium was a new thing at the time in France (Avignon was the center of Ars Subtilior--the more subtle art, in translation) and some of the pieces, particularly by Solage, were obviously about opium smoking since they mention smoking something, and tobacco had not been brought to Europe at that point, and psychoactive cannabis was also mostly unheard of.

Late medieval music/early Renaissance in England was still mostly French court ballads (since the nobility was French throughout most of the middle ages), moving towards more earthy English songs once the Renaissance rolled around (Pastime with good companye, written by no less than Henry VIII about how he's gonna hunt, sing, dance, and eat and ain't shit no one can do about it).

Church music is what we have the most of. Leotin, Perotin, Machaut are all good composers to investigate. I won't really go into the theoretical aspects of this music as I don't know if I can put it in laymans terms without writing a theory textbook below, but if you have any specific questions I'd be glad to answer.

edit: If you're interested in the Ars Subtilior, there are many recordings online and you can look at the Chantilly Codex, the largest collection of the Ars Subtilior, yourself at the following link: http://imslp.org/wiki/Codex_Chantilly_(Various).

double edit: as far as the value of music, it was highly valued, as it was one of the only forms of entertainment at the time. Many people, nobility included, could not read and there wasn't much to read anyway, and books were prohibitively expensive. I don't know anything about secular theater at the time. I do know that music was a major pastime, and nearly everyone dabbled in it.