Song is heard in this Scottish town (3)
I believe the answer is:
ayr
'this scottish town' is the definition.
(town in Scotland)
'song is heard' is the wordplay.
'song' becomes 'air' (air can mean a piece of music).
'is heard' shows a homophone (sound like).
'air' is a homophone of 'AYR'.
'in' is the link.
(Other definitions for ayr that I've seen before include "Scottish town, port and racecourse" , "Scots port on Firth of Clyde" , "Scottish seaport" , "Scottish resort" , "Race course" .)