@richard grant
Thanks! "File > Library > Organize Library... > Consolidate Files" seems to have done the trick. My experience was not smooth but so far it seems to have fixed. For others, when I first ran "consolidated" , i saw song names whizzing by as I suppose they were migrating from external drive to my MBP. However the unnerving part was the false-positives that seemed to still linger in iTunes. For example I'd still see the circle with exclamation point in the far left column seemingly indicating the song file was still missing. I'd try to rerun "consolidate" but nothing would happen. Tried closing iTunes and re-launching - still same results. Bottom line - had to eject external, shut down iTunes, reboot MBP, leave external unplugged, so far I don't see the warning circle and I have checked a couple of albums. Given past history, I am not ready to bet the house on this, but so far seems to be fixed. Thank you.
By the way, why doesn't iTunes let us sort by the far left column so we could sort all missing files?
Or just provide a summary that states where songs are stored?
But that goes back to my original problem when I supposedly did migrate / consolidate all songs to my MBP years ago....why tell me I completed the task when in fact i had not. If I had lost my external hard drive I'd be out a good number of songs that iTunes told me were safely on my local drive.