Can I record the song and tweak the effects in real time?
I can tweak the effects in play mode but I dont know how to do I record that realtime tweak. eg. while playing the song I apply a sweeping distortion or flanger or LFO etc to create a dynamic sweeping effect. How do I save that take?
NO...you can't tweak effects in real time while recording (or playing an instrument) with MMM.
You can only do that if you use hardware stompboxes (or rack-mounted) between your instrument and the computer.
HOWEVER...these morphing effects ARE POSSIBLE after the fact in MMM. Go to ...
Effects (menu) > Automation > Object (or Track) Automation...
This brings up the "Dynamic Effects Editor". This will allow you to apply morphing curves to the various effects on individual arrangement objects and/or whole tracks. As you will see, these effects include...
Volume, Distortion, FX1, FX2, Smooth Filter, Sharp Filter, Panorama (stereo/multi-channel location)
I suggest that you read the section of the manual on "Automation" and then play with the effects to find out what is possible. Good luck!