How do I fix "iTunes Library .itl cannot be read because it was created by a newer version"?

You'll need to re-install the later version of iTunes that last updated your library, or restore an older library (from the Previous iTunes Libraries folder) that is compatible with the version of iTunes you're running now. Some iTunes updates (the last of which was the one from 11.4 to 12.0) change its database structure so that current libraries are not backward-compatible with older versions of the software.

In that case the "iTunes Library .itl cannot be read because it was created by a newer version" message may indicate that your iTunes library has been corrupted. Either restore it from a backup (it is always a good idea to backup your library before installing an iTunes update), or see turingtest2's user tip on Empty/corrupt iTunes library after upgrade/crash.