Create “muffled” music file (e.g. Audacity) with an effect
Create a script that checks the distance from club to player
If distance > threshold then change the sound source to muffled and seek audio to normal position
If distance < threshold then change the sound to normal and seek audio to muffled position
There is probably an easier way but i am no SFX expert
It shows how you can use a spatial audio in your project. You can see how I read the audio buffer and position the little cubes, based on the underlying frequency. Your option is probably to increase the frequency range of the audio, the closer you get to the source.