VLC is one of the best for playing videos; I've never used it for music. If you are having problems playing any video file, downloading VLC should solve it. It uses a lot of codecs that WMP doesn't. You'll actually be able to play more videos in WMP after you install VLC.
As far as the music file problem, I'm not sure what to tell you. I've used iTunes for years and have never had that problem, but I've experienced weird problems, similar to the one you are talking about, when I used WMP on a work computer.
Solutions? I would again recommend iTunes. I don't know what you can do on WMP that you can't on iTunes. If you don't want to do that, just delete the songs/albums that are giving you issues and reload them. It sounds like some of the file paths are crossed somewhere, so you'll either have to move them from the folder they are saved in on your harddrive, or delete them from WMP and reload them.
As far as the folder from the YouTube songs, not sure what to tell you. For some reason, your computer thinks the folder is in use. You could try deleting it from the registry, but I have never done that on Windows 7. Type regedit in the search bar under the start menu, and find the folder from there. You should be able to delete the folder from there.
