IPod's music library only shows items purchased from iTunes store?

I'm really frustrated because I've only had this iPod since Christmas and it's already giving me grief.
My iPod is synced with 918 songs:
However, my music library on the device itself only displays 65, as seen here:
These songs are ones I've purchased from the iTunes store. All other songs on the device have to be manually searched for from the Home screen, and if you ask me this is kind of ridiculous. It'd be nice if, y'know, I could use my iPod to actually listen to my songs with ease, as is its purpose in the first place??
I've resynched numerous times and reset it.
What the heck am I doing wrong?
Cheers in advance.

By the way... ALL music files back to 2004 still play fine on iTunes on the PC...

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