I've tried to imagine this movie with other songs, like maybe if they kept Trouble in (because come on, can't lose that one) but threw in some other random folky late 60s/early 70s songs or - gasp - went in a completely different direction musically but I can't.
Apparently, Hal Ashby was listening to Mona Bone Jakon and Tea for the Tillerman on repeat while he looked through the dailies and felt the music fit the mood perfectly. When first contacted, Cat Stevens was skeptical about having his songs featured in a movie but liked the film's humor and how Ashby used the songs. I think Cat said the first thing he saw was the footage with Miles from Nowhere being used at the funeral and loved how it fit the scene without being overly literal. Ashby basically decided that for any scene without dialogue, they'd just throw on a random Cat Stevens song. Kind of amazing how well that worked out, I don't think there's a song that seems misused to me.
Here's a video of Cat Stevens talking about it, gets relevant 3 minutes in:
https://www.youtube.com/watch?v=yhRO2vAazvM
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