Happy Holidays! To answer your question about how to use Home Sharing with the new iTunes 12, I've included the section from the online help manual for you below:
Use Home Sharing to import items from another iTunes library
You can use Home Sharing to import items from up to five iTunes libraries on other computers. To use Home Sharing, you must have an Apple ID.
Any time you download an item from the iTunes Store to a computer in your Home Sharing network, you can have the item automatically downloaded to the other computers in the network as well.
Turn on Home Sharing
Follow these steps on each computer you want to include in your Home Sharing network.
Choose File > Home Sharing > Turn On Home Sharing.
Type your Apple ID and password, and click Turn On Home Sharing.
If you don’t have an Apple ID, click “Don’t have an Apple ID?” and follow the onscreen instructions.
Import items from other libraries using Home Sharing
Click the Sharing button near the top left of the iTunes window, and choose a library from the pop-up menu.
Click the button for the type of content you want to import (Music, for example) near the top left of the window.
Click the Show pop-up menu at the bottom of the iTunes window and choose “Items not in my library.”
Select the items you want to import, and click Import.
Automatically import new iTunes Store purchases from another computer
Click the Sharing button near the top left of the iTunes window, and choose a library from the pop-up menu.
Click the button for the type of content you want to import (Music, for example) near the top left of the window.
Click Settings at the bottom of the window.
In the window that appears, select the types of items you want to automatically import.
Click OK.
Turn off Home Sharing
On each computer, choose File > Home Sharing > Turn Off Home Sharing.
Tip: If a shared computer doesn’t appear when Home Sharing is on, turn Home Sharing off, and then turn it on again.
This resource will provide you with a general overview of iTunes 12:
I was having troubles finding the 'show items not in my library' popup as well, which brought me here seeking an answer. But no luck, no postings offered a solution that I was able to find.
So I went back to the original instructions (which judysings also posted above), and noticed in the Turn on Home Sharing section it says "Follow these steps on each computer ..." That's where I went wrong. I had established home sharing with the old machine that had the iTunes library I wanted to copy from. I could see the library, and play from it. Looked good... BUT, I had not turned on home sharing on the new machine. It had an empty library so that didn't seem useful. Once I it on for the new machine, and then followed the steps... the 'show items not in my library' popup appeared!
near the top left of the iTunes window, and choose a library from the pop-up menu.
