Whats the point of iTunes media organization?

So after so many years not letting iTunes organize my music..I finally caved. So far its been nothing but one headache after another. I have a huge Music library that I've organized myself since I started it but people kept telling me I should let iTunes do all the work. However it still seems as though im doing all the work, so I've come the the conclusion that I MUST be doing something wrong, hence the reason I am here. My problems:
                                   1) Pointing to a location: I've gone into advanced settings and told iTunes to use my external hard drive. Disaster. All it did was create NEW folders within my already organized drive and filled them with the music that was located inside the iTunes Media Folder (the one that all our purchases go to)
                                   2) Duplicates: Basically all iTunes did was take a bunch of its folders and mix them in with a bunch of my folders which resulted in a cluster duck of a humongoid folder that doesnt know how to tie its own shoe. Now for most artists I have 2 or more folders that are the exact same. Except they aren't. They look the same but some are only decoys to make me click on them and realize they are empty. In some cases they have split music from one artist into two separate folders. I may have figured this one out though: Folder 'A' contains files from a specific artist that i have already added to iTunes at some point whilst making playlists. Folder 'B' contains the rest from that artist that have never 'Linked to iTunes. Which brings me to my last frustration, or at least the last one i feel like talking about..
                                   3) Linking (drag and drop): So in order to get iTunes to recognize any music in any folder I cant just tell it to point to this folder or that folder, I have to 'Link' every song I own to iTunes, which defeats the entire purpose of me asking iTunes to do all this in the first place.
Any time put into reading this mess is appreciated. Any insight on how to not be such a noob with iTunes media organization is GREATLY appreciated.
          -Mikey
P.S. I am using iTunes 11.1.0.somethin or another. Windows 7

Hi,
What do you mean by not recognised?
What is the icloud status of the tracks that have not been matched? In song list, Go to menu > view > view options and tick box. ICloud status tells you what has been "Matched", "Uploaded", "Purchased", "Inelligible", "Duplicate" or "Waiting".
Whilst a track is available in the Itunes store, it is not a guarantee that you will get a match. What is the source of the tracks and their bit rate/
Jim

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