Import iTunes Library into Music not working

I have my old Macbook (2011) hard drive in an external enclosure. The drive works great. I recently restored my iPhone so lost all the music that was on it (which really should be included when you select All Data as the backup, but that's another support request). I don't currently use the Music app on my current computer, because the files take up too much space.

I'd like to be able to re-add the music onto my iPhone, including the specific playlists I had. I figured the easiest way to do this would be to import the old music library into Music and go that way. However, it's not working. I "Choose Library" and select the old .itl file, and then redirect the Media folder to where those files are stored on my external drive. However, none of those songs or playlists (or anything) is showing up - I'm only seeing the songs I've previously bought off of the iTunes Store.

What am I doing wrong? How can I get my old music and data into Music (and onto my phone)? This is very frustrating.

Thanks!