It will not be to your benefit to sue the board of the coop. That is the fastest way to turn the entire building against you, and it will make any future communication between you and board into hostile confrontations. Unfortunately it looks like you already ran afoul of a board member. You do not know how many other people are unhappy about your kids' playing piano (BTW, 7:30pm IS late. many babies and toddlers have to go to bed before or around that time). Coop boards have a lot of power, and it is within their rights to change bylaws. Even if it requires a shareholder vote, I assume most people will not side by you on this. When push comes to shove, they could take away your shares and force you to sell, often below market value because at that time you are completely at their mercy of which buyers they approve. They could make your life difficult.
I live in a coop, and I have gone through an incident where one of my neighbors routinely played loud music in the middle of night. Officially only one neighbor complained, but we all hated it. Eventually the board got involved and sent the noise maker a warning. Things quieted down quickly. It is worth mentioning that the noise maker is a partner at a white shoe law firm.
So your best bet is to be super nice about it and see if you can reach a compromise with your neighbor(s), e.g., shorten practice time, rearrange the practice schedule, or even monetary compensation. Otherwise, you may as well start to find a new place.