I am rewriting this answer, because there were some mistakes before and I've thought of some more stuff since. Firstly, let $f(y)=y\sin(1/y)$. This function is locally Lipschitz in $y$ and independent of $t$. Hence, the Picard-Lindelöf theorem gives local existence and uniqueness of solutions.
How do we prove the existence of a global solution? Well, we can extend the local solution over a maximal interval, which is some $(a,b)$ with $a<0<b$. The only reason that the solution would not extend to $a$ or $b$ is if it diverges out of the domain; in this case, that just means tending to $0$ or $\infty$ in finite time. So it remains to prove that this cannot happen. Before that, let's check out the solutions.
The following graphic is from Apple's "Grapher." As you noted, there are stationary points $1/\pi n$ for all positive integers $n$. These are the only stationary points, since they are precisely the zeros of $f$. When $n$ is odd, we get an unstable equilibrium point. When $n$ is even, we get a stable equilibrium point. If the initial value is $<1/\pi$, then the solution tends to a stationary point. But if the initial value is $>1/\pi,$ then the solution diverges to $\infty$ at an asymptotically linear rate.
Now, how do we actually prove that the solutions extend? Firstly, we can't approach $0$, because we would have to pass a stationary point along the way (since there are arbitrarily small $1/\pi n$). Why don't we diverge to $\infty$ in finite time? If $x$ is very small, then $\sin (x)\approx x.$ Hence, if $y$ is very large, then $f(y)=y\sin(1/y)\approx y\cdot 1/y=1$. So once $y$ gets large enough, the system starts to look linear. Certainly then, we cannot have a vertical asymptote where $y$ approaches $\infty$ in finite time.