"stylo" comes from the latin word for "pen"
"phone" origins from the latin word for "sound".
Once you see who to play it, you know why this name was chosen. Sound samples are available for example here: www.roth-handle.nu/instruments/oddness_stylophone.html
This little toy like (really only a toy?) was invented in 1967 by Brian Jarvis. It was market by the company named "Dübreq" and sold in millions world wide. It was promoted by Rolf Harris in the UK and when it was introduced in Germany. Later Bill Ramsey promoted it here in Germany, because he was much more famous here then Rolf Harris. I still remember seeing ads and short b/w commercials when I was a little child.
Not that much!
Basically it is a very simple oscillator that is only oscillating if the style makes the connection, That's why the pen is connected to the instrument by a wire. But this connection will also prevent loosing the stylo somewhere on stage (Kraftwerk used this "instrument" on stage and studio for 'Pocket Calculator'), the tour bus or the toilet. I have seen also some versions with a little chip inside. The two long bars are resistor arrays for dividing the voltage of the key-contacts. So this is a voltage controlled oscillator.