Cover song lyrics

Some band named The Ataris has recently released a cover of the Don Henley tune “The Boys of Summer.” The original was a decent little tune, and I have heard the new version enough to like it with a slightly harder and faster edge. But today I listened more to the words and not just the tune when I head the following line:
“I saw a Black Flag sticker on a Cadillac”.
This, of course is different than the original line from Don Henley of:
“I saw a Deadhead sticker on a Cadillac.”

I assume that when a cover of a previously recorded song is done, permission is needed. I also assume that some sort of rights or royalties also go to the original singer/writer. In an instance where the song is changed, even something as small as a couple of words, do the same rules apply? Does the covering band also need to get permission to update the song lyrics to include a reference more timely for their fan base?

“Cover” songs are covered under a compulsory mechanical license, one that you don’t need permission from the original performer to get. Given that, whether you can change lyrics depends on your intepretation of this bit from Circular 73 of the US Copyright office:

i hate the ataris. black flag were a good band though