I'm interested in creating a site to develop an online community of
reggaeton music fans similar to this site: www.reggaetonline.net and
mundoreggaeton.com  . There are similar sites to the ones I mentioned
and they all pretty much convey a low budget operation.

Question:
The two sites I mention have a fairly decent news section view
(http://www.reggaetonline.net/reggaeton-news.html  and the other site
in spanish: http://www.mundoreggaeton.com/index-4.htm ) I noticed that
they post  the complete article and cite the source, Reuters, Primera
Hora, Newsweek etc...

Both sites also have a lyrics section in which they post the complete
lyrics of various artists discographies. View: (
http://www.reggaetonline.net/reggaeton-lyrics.html, and
http://www.mundoreggaeton.com/liricas/cd-21/Alberto_Stylee_-_Rebuliando_con_Estilo.htm)
.

Are these sites violating copyrights by posting this type of content?
Judging by their overall presentation I find it hard to believe that
these webmasters have obtain the proper permission for all the content
on their site. If I wanted to add a library of song lyrics on my site
would I have to obtain the permission for every song from every
artist? Does it matter is my site is for profit or non-profit?
Howabout the news? Although the sites I mentioned appear to be
hobbyists the fact that they're running Google Adsense on their site
would make their site a commerical site. 

In essence is there a copyright 'loophole' in their approach that
allows them to do what they're doing? If so, what documentation can
you provide of the legality of this practice?

One loophole might be to host the site on a server in a country that
doesn't enforce copyrights. I wonder if that is any relationship to
your question.

Of course, however both sites mentioned are in Puerto Rico, U.S.
territories. However, I'm interested in creating in creating my site
in accordance and respect to the copyright holders so when I mention
loophole I meant more along the lines of things such as not posting
more than one article from a source or not posting a the entire lyrics
from a song etc...