Can I use navigation via the ConnectedRide Cradle and listen to music playback on my smartphone at the same time?

Yes, this is possible.
On a motorcycle with TFT display you can control playback and select tracks via the TFT display.
If your motorcycle doesn't have a TFT display, you can in addition establish a direct connection between your smartphone and your in-helmet communication system and listen to music in parallel with your use of navigation.
The BMW Motorrad Connected app does not have the functionality for music playback via a separate media player.

Note: The BMW Motorrad Connected app must always be active.