A song IS its performance. Without the performance it is just lyrics and score.

Professional and/or accomplished performers do have a distinct advantage, I wouldn't say it was unfair though.

If you are going to perform a song in a competition you had better learn to perform. If you are a beginner or don't have too good a voice, or if you don't play very well, then you MUST learn to connect with the audience. Pick someone and make eye contact. Don't get stuck on the same person all the time though look at different members of the audience. Sing TO the audience. Don't put on a fake style no matter how much you like Dylan. CONNECT and be honest with the audience.

If you really suck at the guitar, or whatever, then put the bloody thing down and sing acapella, it will emphasize your connection with the audience.