Q: Missing iTunes library and playlists...please help

One possibility is that your iTunes library file became corrupted, so iTunes started up using a brand new iTunes library.  Or you may have mistakenly set iTunes to open a new iTunes library.  If you are using the default setup, the iTunes library file is in your iTunes folder and called iTunes Library.itl, at this location

[startup disk]/Users/[your user account name]/Music/iTunes/iTunes Library.itl

NOTE:  This iTunes library file is a database that defines your iTunes library.  It does not contain your actual iTunes media files, which are organized and stored separately.

Go to that location using a Finder window; what do you see?  If you see a file called iTunes Library.itl there, quit iTunes (if running) and use this method to open iTunes using that library file.

Open a different iTunes Library file or create a new one - Apple Support

If it does not open, or you still get an empty library in iTunes, do you use Time Machine to backup your startup disk?  If you do, you can Restore your iTunes library file from a backup (date/time) state when it did not have this problem.  In your case, it would be immediately before the last time you used iTunes with a working library.  Time Machine makes incremental backups every hour, so this should be very close to when the problem occurred, so your iTunes library should be mostly up-to-date.

If you don't have a backup (why not?) of your user data, look in the iTunes folder for a folder called Previous iTunes Libraries.  iTunes makes these backups when there is a major update to iTunes, in case something bad happens or the user needs to go back to previous version of iTunes for some reason.  If the most recent "previous" iTunes library backup is not too old, you can use that library file to open iTunes, using this procedure

If you don't see your content after you update iTunes - Apple Support

You may want to run Disk Utility, and do a Verify Disk (under First Aid) on your startup disk.  You may have more general data corruption, not just to the iTunes Library file.

Is that because I have an older computer and am running snow leopard still?

Yes.  You need Mountain Lion (10.8.5) or later to run the latest iTunes, according to System Requirements on the iTunes download web page.

I had a good look at my iTunes folder and there is a file called "iTunes Library (damaged)".  Is this why my old iTunes has gone missing?

Interesting that it got renamed like that.  Yes, I think the "damaged" one is your iTunes library.  The one currently named iTunes Library.itl is probably the new one iTunes created (that is blank), when your actual iTunes library file became corrupted.  Do you see a folder there called Previous iTunes Libraries?

The .xml file is something iTunes creates for external applications to access data from iTunes.  You may be able to rebuild your iTunes library from the .xml file, if it is more up-to-date than anything else you have as a backup.  In the Finder window, look at the modified date on the iTunes Library.xml file.  This article describes how to do it

http://www.touchgeeks.com/rebuild-itunes-library/

Could any of this have to do with icloud or match or anything like that? Because now when I open iTunes and only see the music purchased from iTunes

The problem is probably not related to iCloud or iTunes Match.  Because your current iTunes library is new, it does not show any songs you have stored on the computer's drive (this library does not know you have those songs).  I think you can see those purchased songs because iTunes is showing them from iCloud (iTunes Store); they are not stored on your computer's drive.  If you make the iCloud Download column visible (it has a cloud symbol in its heading) in your iTunes music library song list, you should see a cloud with down-arrow symbol for those songs.  If you sign out in iTunes (from your Apple ID), those songs will probably disappear from the song list.

The actual cause is likely to be your iTunes Library file becoming corrupted for some reason.  Files on hard drives can become corrupted; the entire drive can become corrupted or mechanically faulty.  That's the reason for doing regular backups.  Time Machine is a way (a built-in feature of OS X) to automate the backup process; set it and forget it (until you need it).

If you have Time Machine, open the Time Machine File - not Time Machine itself, but the Backups. folder and into the your archieves. Then go to (Name of your Mac)>  Latest> Mac HD> Users> (Your Computer ID Name)> Music> iTunes and then drag and drop onto your desktop:

iTunes Library Extras.itdb

iTunes Library Genius.itdb

iTunes Library

You do not need the iTunes Music Folder as it should be already in your El Capitan Music Folder, as the files are stored there during your update. Once you have dragged and dropped these items, open your Music Folder, go to iTunes and drag and drop these into that folder. You will be asked if you want to replace the already existing items, and click Replace. I did this, and all my old Library is now in my new iTunes from El Capitan.

Hope it works for you.