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Question: What is the instrument used to play the song in this recording?

Answer: It is a reed organ manufactured by Estey & Company in the early 1900's. Right around 1910, I think. It is technically a melodium of the reed family of which an accordian is also a member. The player pushes on two foot pedals that are attached to a pair of large bellows that move air through the brass reeds. Any key which happens to be depressed sounds a note. This organ has three sets of reeds that can be split, and controlled independently of each other. It also has a one octave set of sub bass reeds.
A harmonium is an even closer relative, the only difference being a harmonium pushes the air through the reeds and a melodium sucks it through. The melodium is the mechanically superior version. These reed organs were very popular in the mid-1800's up into the 19th Century. Back in those days if you wanted music you had to make it yourself. They are also very popular today, with me!
Here are a few pictures of the very organ that made this recording: