As for Handel's Hallelujah, being a fan of classical music, I am sure that Pope Benedict is a great fan. This does not mean that is should be sung at a liturgy. At a special concert in praise of God, by all means!
… his statement about Protestants not being real Christians.
The Pope never said that Protestants were not real Christians, but rather that their ecclesial gatherings were not true churches. This flows from the Catholic belief that a church is a divine institution based upon Apostolic succession of Holy Orders and centered around the Eucharist (neither of which most Protestants claim they have). It is a question of Sacramental theology. As for being a real Christian, this comes from Baptism. Provided that the proper matter and form are used, the Catholic Church does indeed recognize that baptized Protestants are real Christians.
It seems to me that a liturgy can be so out of date that it is an impediment to real worship. The Protestant churches have been having a transition to modern musical styles from the great hymns of the 1800’s and early 1900’s . . . traditionalists and older congregants like the old hymns because the words are so theologically sound and meaningful and the younger church members want music that they enjoy. When you freeze music for 100’s of years though, in my opinion, it becomes at best an acquired taste and at worst a form of worship that no longer leads to actual worship but just rote repetition . . .