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It’s called Multisqueeze and it runs multiple instances of the Player Squeezelite where you can define each with a different output, using audio jack, HDMI or sound cards.
I know. On the one hand this is great, on the other hand, one little detail is missing.
Audio jack, HDMI and sound cards have to be attached to the RasPi.
There is one little thing missing, let’s call it something like „virtual http audioport“
=> instead of using real hardware, it should again provide the sound to another port via TCP/IP.
Instead of the ESP8266 you could also take a cheap WLAN Radio, and imagine the Radio station to be played was one certain Squeezeplug instance.
Is it better understandable?