Here's a somewhere-in-the-middle perspective. I've recently been learning the mandolin, as part of a community orchestra. I can kind of read sheet music (for the piano at least) having learnt a little piano in high school. So give me some sheet music and I can work it out after a couple of tries. I can also mostly work out a song by ear (perhaps after being given a few notes). Both are really important, and use different neural pathways and feedback mechanisms (eyes -> hands vs ears -> hands).