iTunes library is very large and will not add Apple Music library - will this cause problems if I migrate to Catalina/Apple Music Mac app?

Apple Music, the service, is limited to matching/uploading 100,000 tracks. If you want to use the service you might need to start a second library and choose what you add to it, then run your libraries in parallel. I have about 65,000 tracks in my full library, and 10,000 in my cloud/Apple Music library. It doesn't matter if you're using iTunes or the new Music app in Catalina. As this stage I would suggest that the Music app in Catalina is less suited to managing large libraries than iTunes, in particular I miss album artwork in the songs layout and a permanently available filtering search tool. I also prefer a unified app over multiple components that aren't integrated to work with each other.

tt2

Apple Music works, but the 100k track limit is fixed. For comparison Spotify's limit is 10k. While your current month/trial lasts you can explore the service in a separate library or an iOS device and decide whether or not you have any use for it. Or if you only just signed up in the last day or two and found that the limitation makes the service impractical for you then Apple Support may be able to give you a refund.

tt2

Indeed, smart lists can only be made in iTunes (or Music in Catalina). To sync to the cloud there can be no dependencies on other playlists. Sounds like you're already using Apple Music with a limited library, but on your work computer rather then where the bulk of your media lives.

tt2