I doubt many hotels will help with a residence permit for a lounge musician...they're usually treated as transient contractors and not direct hotel employees.
Getting a visa in Jiangsu Province has always been a pain, and it's getting a lot worse everywhere as the Olympics loom ever nearer. Sometimes it's also harder in general for Filipinos to get visas than it is for other nationalities.
It might be worth looking to see if the hotel will sponsor an F (business) visa, which is a lot easier and cheaper than providing a residence permit, but for now your only choice may be to get shorter-term Tourist visas and renew them as needed. Unfortunately it may be hard to get anything longer than 30 days...
I would suggest not even trying to get a tourist visa in Suzhou. The rules and requirements here are just madness. Get/renew it in Shanghai if you can, but your wife's sister will probably have to be ready to go to HK or Macao periodically.
Be very careful using an agent to get a visa. I have friends here in Suzhou who have been given fake visas by Shanghai visa agents...with serious ramifications when their visas finally got checked by the police. These were well-known, long-standing visa agencies with impressive websites, too...
Your best bet is to simply go to the friendly folks at the Shanghai Bureau for the Inspection of Livestock and Foreigners and get the visa yourself if you can.
Raoul
Raoul's China Saloon
http://www.raoulschinasaloon.com