When prompted, select the difficulty of dance you’d like to attempt – note that by selecting “Let’s take it easy”, you will not be able to score the best Rank and maximum amount of CP, which affects your ability to unlock Episode 8.
To complete the dance, simply hit the buttons as they appear between the arrows on-screen. There is also a cheat for this section if you are struggling: When the music starts hold L1 + L2 + R2 + R1 + Square + Triangle + Circle + X until the 3 music notes in the top of the corner disappear (on some versions you have to hold the buttons down until the end of the dance).