There are 2 main ways to regulate the volume on the stylophone. The simplest way is just to add a 100 ohm resistor inline (series) with the speaker. to do this, remove one wire from the speaker and solder the resistor between the wire and the speaker.
You can solder a switch across the resistor so you can easily select either full or half volume. (R2 and S2 in pic) In most equipment you would -most likely- damage the amp by adding 100 ohms to the speakers impeadence, but the original stylophone uses a very basic one transistor amplifier and so the impedance isn't critical and it will work happily with the added resistor. I have developed this switching whilst working out a solution to use in my own stylophone. It has been successfully working for a number of months without any issues.
The second way is to add a variable resistor to the base of the amplifier transistor to give a fully variable volume control. Lift the base leg of the amp transistor and connect it to the wiper of a pot (maybe 10k), connect one end of the pot to ground and the other side to where the base leg went. This is the basic description of an experiment I did. It works, but I have not had time to draw diagram/take photo yet or work out an optimal value of the pot. I hope to experiment more with this when I get time