Apple Music incompatible with local files

I started using Apple Music recently and I've been unable to achieve the functionality I hoped would exist with this subscription. Can someone tell me if my goals are impossible with iTunes? I'm bit of an old school playlist freak and I'm used to downloading music from torrent, bandcamp, etc. and then manually managing playlist on my Macbook before plugging in my iPhone and uploading. I wanted to move into the future so I made an Apple Music account and tried selecting songs from the Apple store and adding them to my pre-existing playlists. But when I tried, I received a notice saying I had to upload my music library to iCloud Drive before I can songs to my playlists. I'm guessing since my library is like 10,000 songs (~200 gb), uploading to the drive does not seem to work. I left my computer on for 5 days and nothing seemed to happen. Except now when I try to play any local file from iTunes, the app crashes, seizes the external hard drive that stores the music, and then my computer doesn't shutdown until I do a force shutdown. And it appears iTunes is trying to make duplicate playlist of my already existing playlist which I don't want either. But if I browse the Apple music store on my iPhone and add them to playlists on the phone, it appears to work. So basically is it possible to add apple music files to playlists with local files on the Macbook and then transfer/update the playlists on my iPhone? Or should I give up and just export my iTunes playlist to Spotify where I can create new playlist from the Spotify database? I am using a 2017 Macbook Pro running macOS Mojave v10.14.6 and my iTunes is Version 12.9.5.5