Every current party member is affected, at any range on the map; a member exchanged into the party, or summoned creatures, will not have it until it's re-activated. On entering the camp, all party members will lose the effect except for the Warden if he/she is the one who activated it.
The bonuses are determined when the bard begins singing the song; changing equipment while the song is active does not change the effect. The bonuses apply equally to melee and ranged attacks, but not to staff attacks. Damage dealt by spells is unaffected.
Same bonus is applied to each hand if dual-wielding.
In principle, two or more Songs of Courage maintained by two or more bards will stack. However, there is a catch. For example, bard X activates Song of Courage. When bard Y toggles his own Song of Courage on, it will replace any effects of Song of Courage maintained by bard X only on bard Y. Which means, the rest of the party, bard X included, will, indeed, benefit from two stackable Songs of Courage.
Song of Courage provides a flat bonus to critical chance determined by the above formula, meaning it does not double current bonuses. On console versions of the game, due to the fact that the Warden has no base critical hit chance, the Song of Courage (sung by any active party rogue) is the only reasonable way for a PC Warden Rogue to increase ranged critical hit chance when using basic equipment (i.e. no built-in critical chance boosts). Warriors have Blood Thirst with the Warden's Keep downloadable content. On PC, Shale's Rock Mastery can be used to increase ranged critical chance and attack speed for Warriors and Rogues, but on consoles, one pays for the critical chance bonus with up to 7 seconds added to aiming animation, rendering archers remarkably ineffective.