Okay, here are a few tips:
1. The improv part counts. When I did this sidequest, I didn't play anything during the improv part because I didn't think it meant anything. I would get to the end of the song, and then I would fail. Make sure you still play your best during the improv.
2. Make your movements refined; swing the Wii Remote and stop. This will avoid putting in those 'extra' notes and improve your chances.
If you're having trouble remembering where the rhythm breaks are, just keep trying again and again. You'll get it eventually. Good Luck!