Take a deep breath, relax. iOS 7 introduced new features which you're not used to, and may not have a use for, but others do find these changes useful.
As noted above, the cloud symbol indicates something that you've purchased but have not installed. This applies to your iPhone and iTunes, but can be turned off if you don't want to see such things:
On your iPhone: Go to Settings/iTunes & App Store. Under the "Show All" heading, turn OFF the setting for Music and Videos. This hides purchases you've made but not loaded onto your iPhone, which keeps your Music and Video apps "clean" so that you can only play items which are actually on your device, or make playlists from them.
On iTunes: Go to Preferences/Store. De-select "Show iTunes in the Cloud purchases". This may not be necessary, but I turn this off because there are times when I'll alter the tag information of something I've bought from iTunes, and without this turned off I'll see the original (unaltered) version available as an iCloud download, which is not necessary.