So the idea is to work on songs that are somewhat beyond you until they
are within your grasp. But oddly enough, boredom and creativity are brothers.
People think of other ways to do things when their mind wanders. If you
can just barely do something, like driving a car with a flat tire through
a construction zone to find a place you can pull off, you don't think
of seven ways to change it up. It's when you're driving 400 miles
down the freeway at 75 that you solve the world's problems - or when
you're in the shower. Your mind is occupied, but not completely. This
is the dark green area, songs you do well. This is where you start thinking
of how to change up your song, your chords, your rhythm, your accents
and articulations.
Thus it's not bad to work on easier songs and it's not bad to work on songs until you do them very well, because you will probably come up with ways to make that song your own. Also, how well you sight-read, how well you've trained yourself to react and play/sing without practicing is your starting point on a song; the level where you sight-read songs first time is obviously your entry point to a piece of music. Therefore, it behooves you to get better and better at this skill, so you spend less and less time practicing and more and more time playing. Because you aren't going to work on this sight-reading piece, you're only going to read through it twice, so it must be somewhat easier or you'll never get through it, and developing sight-reading is muy importante for sounding better quicker.
Summing up what pieces to be working on, don't work on songs that are way out of your league, because they consume too much of your time for little payout. You may be able work on excerpts from the epic pieces, though. Listeners do not line up and rank songs by ABSOLUTE skill, they rank songs by relative skill, what sounded the most masterful. Yes, you get up and do 'Mary had a little Lamb' and the next guy plays 'Eruption', both of you flawlessly, Eruption guy will win. But you'll sound better doing a simpler song perfectly than the guy who tries a harder song and doesn't quite make it. Start working on songs that have a few things you can't do or would like to learn, stick with it until it's pretty good. Difficulty of pop/rock pieces chosen to work on should generally be ones that take 3 to 6 weeks to complete, classical pieces 1 to 3 months. Anything harder needs to wait til you get better (again, I'm generalizing). As you work these somewhat difficult songs and master them, let creative ideas flow, make the song groove, because you know it really well. Learn to sight-read (all instruments and voice) and you'll spend more time performing and less time practicing.
