iTunes/iPod only downloads 255 songs?

It's possible for purchased songs (and other media items) to appear in your iTunes library, without their media files being accessed from your computer's local storage. For purchased items, they can be accessed and streamed from iCloud (Apple's iTunes Store servers), if they are not accessed from locally stored files. However, to sync to your iPod, the media files must be stored locally.

NOTE: If you have an iCloud Music Library because you subscribe to iTunes Match or Apple Music (or both), the same situation can occur for ALL of you songs, not just purchased songs; iCloud Music Library makes ALL of your eligible songs available from iCloud.

Therefore, one possible cause is that most of your songs are currently being accessed from iCloud, because you did something (or a problem occurred) that caused iTunes to lose track of where its media files are located. For example, if you move the folder with your iTunes media files manually (outside of iTunes), iTunes does not know they were moved, and iTunes loses track of their locations. However, if a song is available from iCloud, iTunes starts accessing the song from iCloud without any error message. In your case, the "255 songs" are the ones you added after this problem occurred (so iTunes does know where they are located locally), and they can sync to your iPod. The remaining songs are not being accessed locally, so cannot sync to your iPod.

To check, show your iTunes music library using the Songs view (as a plain list with columns). If the iCloud Download column is not visible, make it visible (right-click the song list heading row to show/hide columns). This column is narrow with a cloud symbol in its heading. If a song is being accessed from iCloud, it has a cloud with down-arrow symbol in the iCloud Download column. Do you see that cloud symbol for most of your songs?

The best way depends in your specific situation. Do you have an iCloud Music Library from a subscription to iTunes Match or Apple Music, OR are all (or most) of your songs purchased from the iTunes Store? If you have an iCloud Music Library, is it from iTunes Match or Apple Music (or both). It works differently (in a very important way for this situation) depending on which service you have.

Did you manually move the folder where your iTunes media files are stored, using the Windows file manager, or change drive letter assignment, or change a folder name (along the file path)? If you did, and iTunes just lost track of where the songs are located, the song (and other media) files may still be in your computer's storage somewhere. iTunes lost track of where, and starting accessing them from iCloud. You can try doing a general search for the name of one of your song, to see if you can find its file. If you find one, the others may be stored along the same path.

Another thing that will be helpful... Open iTunes preferences Advanced pane. What does it say there for the current location of the iTunes Media folder? This is were iTunes puts the media files you download from iCloud.

Please provide clarification on the above.

OK, you have iTunes Match. That's GOOD. That means all song files you download from your iCloud Music Library will be DRM-free (no copy protection). IF your iCloud Music Library was from Apple Music only (and you did not also have iTunes Match), matched songs would download with DRM, and you would not be able sync those those matched songs to your iPod (because of the DRM).

To download all songs with the cloud symbol with one action, do the following. First, sort your music library song list using the iCloud Download column (click the heading of the iCloud Download column). All songs with the cloud symbol appear together on the list. Select them all at the same time. To do this, click the first song with cloud symbol to select (highlight) it on the list. Scroll the list to show the last song with cloud symbol. Press and hold down the Shift key. Click the last song with cloud symbol. The two songs you clicked and all songs in between are selected at the same time. Right-click the selection and Download. It will take a while...

NOTE: You should confirm the previous song files are not stored somewhere on your computer's drive. When you download your songs from iCloud, if the previous song files still exist on your computer's drive (taking up space), you may run out of storage space when you download them from iCloud. Even if you have plenty of free space, the duplicated song files will be wasting space.

You mentioned other media types, such as movies and TV shows. Purchased videos can be downloaded again in the same way. There is no personal "iCloud library" for videos, but purchased items are accessible from iCloud.

After completing the downloads, you may want to go to your Purchased screen in iTunes Store, to see if there are any items that were not listed in your iTunes library. All purchased items are not necessarily listed in your current iTunes library.

Download your past purchases - Apple Support

Show the Purchased screen with the Not in My Library view, for each media type. Also, in case you accidentally made any purchased items hidden, you can check here.

Hide and unhide purchases in iTunes or iBooks on your Mac or PC - Apple Support