David,
You obviously know your way around computers, filing systems, and all that, so it might be helpful to outline briefly how iTunes handles media files -- music, videos, podcasts and what-have-you -- so that you don't find yourself working at cross purposes with the application. (All of the following assumes that you haven't changed the basic iTunes settings in Preferences > Advanced, as mentioned above -- which is the course I strongly recommend.)
Basically, iTunes is designed in such a way that you should never have to work directly with files in the Finder. In fact, anything you do in the Finder, especially in the iTunes Media folder, is likely to create confusion in the iTunes database, which is maintained in a document called iTunes Library.itl. Thus, for example, the way to add new music to iTunes is not (as we old-school types might think) to move it into the folder Music/iTunes/iTunes Media/Music, but to do one of the following:
• Drag the file or files into an open iTunes window
• From within the application, go to File > Add to Library, and navigate to the file(s) or folder to import
• Drag the file(s) to the folder Music/iTunes/iTunes Media/Automatically Add to iTunes. As a shortcut for this step, you can place an alias for this folder on your desktop.
What happens next is that iTunes first processes the file, integrating it into the iTunes Library.itl database, and then copies the file into the iTunes Media folder -- often renaming the file in the process. In doing so, it creates a link to the location of the newly imported file, and stores this link in the database.
How is the iTunes Media folder organized, then? This is done first according to media type -- so that music files go into a folder called Music, and so forth -- and then by way of the metadata tags written onto the files themselves, following this file structure:
[Artist]/[Album]/[track# song title.extention]
So the first track of the Grateful Dead's American Beauty album will be filed as something very like:
Music/Grateful Dead/American Beauty/01 Box of Rain.m4a
The exception is for compilation albums by multiple artists. As long as these are tagged correctly, they will be organized like so:
Music/Compilations/[Album]/track# song title.extension
Now a crucial point: Whenever you change one of the tags used by iTunes in organizing your library, your file structure will be changed to match. So for example if you correct a spelling error in the artist's name, or type in a missing album title, the file itself will be updated, moved to a new location, and/or given a new file name accordingly. And the iTunes database file will, of course, also be updated. All this happens "under the hood" and you don't have to think about it, but it's important to keep in mind.
So back to the original topic here: the way to clear up problems in your iTunes library -- in particular the proliferation of "Unknown Artist" or "Unknown Album" entries -- is to fill in all the crucial tags as completely and correctly as you can, within the app itself. iTunes will handle everything else.
There's a way to make this relatively easy. Make your whole library visible by clicking the Music icon in the upper left. Set the view to Songs by using the pull-down menu in the upper right. Now click on one of the column headers -- Name or Artist or Album. This will sort your library by that category, and any tracks with an empty field will be clumped together at the bottom. You can begin picking them off. The simplest way to fill in the empty fields is by way of the Get Info window -- fix one track, then click the Forward arrow to move on to the next.
I hope this is enough to be going on with, and not a case of Too Much Information!