You shouldn’t have to worry about fakes on Amazon. It’s eBay where things can get a little iffy.
The database is like a document that can only have a certain number of characters and then cuts off. If your tags have more info in them–Electric Light Orchestra as Artist, instead of ELO–that’s more metadata, more characters. Lots of longer tags mean that fewer of them will fit into the database. So it’s not an exact number of songs.
Not sure I understand (3). If you want to put a playlist of songs into a folder and then play the folder under Music/Folders, yes, you could do that.
Tags are very flexible and can be used all sorts of ways. You could also make a folder, copy the songs into it, use mp3tag (free tag editing software) to decide the track order and change the Album title for those songs to My Playlist (or anything else). I sometimes do this after I’ve seen a band–I copy the songs from the setlist into their own folder, open mp3tag and change the album names (since the songs are from various albums) to Setlist.
Both of those methods involve making another copy of the song and placing it somewhere instead of having the player find the song in its original folder, which is what a playlist does.
There is other music library software, like Media Monkey, that’s also good with playlists. The free version is fine–all you get with the paid version is mp3 ripping, which you can do with another program or tweak into the free Media Monkey.