I recommend that anyone with gigs already scheduled, go ahead and play them. Yes, people will be coming to be entertained; if they don't want to be entertained, they will stay home and you won't have to worry about them.

I also recommend you confess your discomfort to the audience, in whatever style you feel most comfortable talking to the audience. Being honest is the best way to establish rapport with the audience. And honesty is what folk music is all about, IMHO.

Play whatever you play well. I mean, whatever you play well, go ahead and play it. Aw, you know what I mean!