Hi RDGinTN,
Thank you for using the Apple Support Communities. I understand the crossfade function isn't working as expected in your iTunes library.
You mentioned you're playing content from your Mac to a stereo system; do you get the same result when playing directly through your Mac internal speakers? Knowing this would help to narrow down the issue.
Also, it looks like iVolume is an app intended to normalize volume levels across tracks, and it sounds possible that this could be a factor. Are you able to test with this app disabled to rule that out?
If you see the same behavior after testing the above, try testing this in a new user account to determine if the issue is system-wide or user-specific: How to test an issue in another user account on your Mac
I hope this helps get you started. Take care.