Note, I am still learning myself, but your album image problem and the cue sheet response is familiar because I just learned something I had been "doing wrong". I was ripping CDs with the "file per disc with cuesheet" selected in the "Rip CD" window (alt-r shortcut), rather than "file per track". Not sure when I changed this, but I discovered it because I started having the same problem that the LAST-internet-found OR otherwise-copied image was appearing for two just-ripped albums by Armatrading: It wasn't until I guessed/found my problem and re-ripped one album with "file per track" that the expected album folder was created -as with prior rips, and that the MB-found OR selected image was retained regardless of what I did with other album's image.
The only time I experienced your twice-listed-track problem was when I was doing some library-folder renaming, copying & pasting, etc., and MB was evidently reading two library folders. The invented-playlist problem I have not seen.
Take your time: Learning MB is fun and worth it.