I have the same problem with my iPod 5. I was using iTunes 11 with iOS 7 and everything was fine. Then I upgraded my iPod from iOS 7 to iOS 8 and began experiencing many of the same problems you're describing. So I upgraded my iTunes to version 12, hoping it would fix the problem with my iPod. It didn't so my conclusion is that the problem is with the iPod iOS 8. I also have a 4th generation iPod with its original operating system and it still works fine with iTunes 12.
Fortunately, since I have always manually synced my iPods, I still have all my music on my iPod 5 - I just can't add new songs or update playlists. It also doesn't work with my car audio system anymore (although the iPod 4 does), but it still works with my wireless speakers at home. So not all is lost, but it is frustrating to take Apple's advice and upgrade THEIR software and then to have all these problems.