unity 3d game using youtube videos api - unity3d

youtube video selection
youtube video played on background
hello so i want to ask few questions , i have managed and developed a game , me and my developing team to use youtube video player api and use the player to select music and then hit the play button to play the arrows game while video and music played on the background.
this is the main idea of the game, were you have songs from youtube that we add using youtube link and it just loads the video and streams it using youtube api java files that they provide for developers and we let players play the video and play the arrows that we have built our selfs.
we dont use or modify or change or download any files from youtube.
all the images, videos, sound are loaded through youtube API for android.
are we allowed to have this and to develop this game for android and IOS and let poeple download it and play it ?
thank you

As long as you don't circumvent ads on any videos/music and don't claim it as your own, I don't see why not? Youtube is a platform for viewing, not stealing. So if you're just viewing, go for it.

so as i said we dont run ads inside the video, we just load it using their api they provide for developers.
you choose the song > loads from youtube > we get info like image > we sync arrows related to the song length and current song time (all info loaded from youtube api and we save them on the script) then we have the arrows script that we developed it starts based on the info we get from youtube song
and when the song starts the arrows starts and start spawning the arrows based on an xml file that we create.
so after the user played the game he will get music credits based on how good he did and how many stars he collected (max of 5 stars) so he can buy avatars for him or unlock new songs to play. or choose to buy vip access and play all free.
so this idea is a combination of different games that we already saw on market
1) flash flash revolution (4 arrow rythem game like DDR)
2) tap tap reborn 2 (mobile game that uses youtube api as we do but it has guitar hero style) its already on market with ads/vip/coins to unlock and play music.
3) "just dance now" on mobile (stars and score and music credit)

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Update after WWDC 2015:
Good news! Now it's possible!
Link to sample code:
https://developer.apple.com/library/prerelease/watchos/samplecode/WatchKitMoviePlayer/Introduction/Intro.html
Summary:
Now there is a class (WKInterfaceMovie) that allows you to play videos on the watch :)
From the docs:
A WKInterfaceMovie object lets you play back video and audio content
directly from your interface. A movie object displays a poster image
with a play button on top of it. When the user taps the play button,
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Class Reference:
https://developer.apple.com/library/prerelease/watchos/documentation/WatchKit/Reference/WKInterfaceMovie_class/index.html
Using the current APIs it might be difficult/impossible.
Still, the camera application on the apple watch is receiving a live stream coming from the camera of the iPhone at a quite good rate.
Most of the apple watch apps are not using only the publicly available APis but it shows that it should be feasible (not talking about the sound here...)
update:
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