Can you chain a USB hub off a USB port on a Thunderbolt display? I'm considering getting a display with thunderbolt connection, to use as extra screen space and as docking station (on a macbook pro 2012)

Right now I'm using a USB hub for all the peripheral devices (music keyboard, soundcard, external harddrive, printer etc.)

If I plug that usb hub into the usb port on the display (or directly, without the hub), will it all function as it did before?
Yes. The Thunderbolt Display USB ports work well to connect a hub for more downstream devices. There is also enough power for unpowered hubs to connect low power devices like mice and USB flash storage. You will want a powered hub if you have multiple spinning hard drives or devices that you wish to charge from the hub itself.