AlexT: yes, pressing F6 in Alsamixer did get me to select the inserted USB sound card. But after I exit Alsamixer and run mpg123 from the command line, I still got the same errors:
pulse.c:84] error: Failed to open pulse audio output: Connection refused
[audio.c:643] error: failed to open audio device
[audio.c:180] error: Unable to find a working output module in this list: pulse
[audio.c:545] error: Failed to open audio output module
[mpg123.c:913] error: Failed to initialize output, goodbye.
Can you try it? I think something is missing in setting up mpg123. If someone figures out how to play mp3 on Edison, it would be very appreciated.