You should be able to access your whole iTunes music library. Of course, Home Sharing has to be turned on in iTunes (File > Home Sharing) and iTunes must be running.
On the iPad, as you say, Settings Music > Home Sharing must be Set up.
If all this is good you should be able to access Home Sharing by touching the More button at the bottom of the iPad Music screen. This should bring up a selection with Shared as one of the choices. Touching Shared gives you the choice of My iPad or <your name> Library. Touch <your name> Library and the Music App should show (slowly perhaps) everything in your shared Music Library.
Where is this going wrong?
I've worked this out now and got it to work.
It was either:
1) An old Apple ID password was stored in the Home Sharing settings, or
2) The Apple IDs weren't exactly the same on my computer and the devices (I have one Apple ID but 2 email addresses that work on it - one hotmail and one icloud).
Either way it's now working!
Is it also possible to have Home Sharing for photos via iPhoto or Aperture?