Update 2: I found the root cause of the issues I've been having, and reported it properly here: http://community.spotify.com/t5/Help-Desktop-Linux-Mac-and/Bug-Report-Your-Music-doesn-t-sync-correc...
Update: I have dug further and found primarly one specific bug (#1 below) that's behind most of the issues with Your Music. So here's a new a revised request list of issues/fixes:
To get technical about #1: There seems to be two internal lists that make up Your Music, one for songs, and one for albums. The Artists section is derived from the albums list, as saving an Album always adds the artist too. The idea would be that these two lists are always kept in sync when a song/album is added to your library, but this currently fails. Hence adding an album doesn't always add it's songs to the Songs section, and adding a song rarely adds it's album and artist to the Albums and Artists sections.
In my testing, saving in album adds all songs from the album to Songs about 90% of the time. While adding a song adds the album and artist to the Albums and Artists sections about 2% of time when clicking on the + button next to songs. If you drag-n-drop the song(s) onto the Songs section, it never updates the Albums/Artists sections.
Fixing the above bullet points will in my opinion solve 95% of the issues with Your Music. As it ensures Your Music is a singular storage of your actual music, including songs/albums from local files that Spotify aren't aware of.
Personally I had until now simply created playlists from albums and playlist folders to try to build a "Library".
Origianl idea submission:
This is a summery of my suggestions from this post: Thoughts/complaints about new Your Music feature and Stars (and Spotify overall)
Please read or at least skim through the above linked post to get an idea of why Your Music is a catastrophe and needs fixing.
Without further ado, here's my list of suggestions to fix it:
Not vital to fixing the mess that is Your Music, but they will add to the above suggestions and make Spotify overall better and more consisten to use.
As mentioned by the author of this topic, the discussion / bug report is continued here: