PC as Bluetooth Airplay receiver
Found the solution myself.

For some reason, after pairing, you still need to manually connect.

This functionality however is completely unavailable in the preferences window and can only be accessed using the Bluetooth icon in the menu bar.
Once there you simply have to select the paired device to stream your music to and choose connect.

After doing so the mac will automatically open iTunes so you can test your newly made connection.

Note: this can only be done on the mac, there is no way to request this type of connection from the PC.