help!!! lots of problems! iPhone 4s & Mac

Alright, so I've looked at many discussions and can't find my specific problem.

I have an iPhone 4s and a MacBook.

When I go on my iPhone, most of my music is gray-ed out and has a red square in a red circle to the right of it, like so-

and when I click on it, it opens to play, then skips all the similarly marked songs until it gets to one that is playable.

I figured something was wrong with the songs on my iPhone. I plugged in my iPhone into iTunes.

I went to "On this iPhone". There, I see this--

Even the songs I've bought on iTunes (Can't Hold Us, first in list) are grayed out. Then, some have an exclamation mark which usually means the location is missing. However, when I right click to find the location, it's not even an option. There is even another problem where theres a dotted circle (see last two in picture). I have no idea what's going on, especially because ALL of those songs work perfectly on my normal iTunes.

And I really don't want to restore my iPhone if I don't have to.