M1 MacBook Air to M1 iMac 24

Here is my issue. All my music, playlists, tv shows and movies are on an external hard drive. I recently switched from M1 MacBook Air to M1 iMac 24. I plugged in my external drive on the iMac, changed preferences in music to the folder. It shows my iTunes purchased albums just fine. What's missing is my hundreds of playlists and stuff I ripped myself. It DOES show up when I plug it back into my MacBook Air, but not on the new iMac. I spent time with Apple Support and they informed me that now I would have to subscribe to iTunes Match. I'd rather not do that. My playlists are DOWNLOADED on my iPhone 13 Pro Max. When I try to sync it to my iMac M1, it asks me to erase what son there to start syncing music and playlists. I'm not sure what do to. Again, I don't store anything locally on the Mac, only on an external drive that I've moved to a few new Macs and never had a problem. Any thoughts? Thank you!