Gee, it was all clear to me...
1. Tried the instructions for posting images - didn't work. I hit Alt+PrintScrn but when I selected Camera from the Actions window, I could not see any option to "Copy from Clipboard". Using Version 12.0.279.
I love screenshots. I eat 'em for breakfast, but setting up Pix is a project I have not yet tackled.
2. The image files were imported to the library. They are not cover art, but scans, downloads, and digital camera images.
3. My MC library display that appears after starting MC12 and clicking Audio at the upper left consists of a 3-pane window. Artists are listed in the upper left pane, Albums are listed in the upper right pane, and files are listed in the lower pane.
4. Auto-Import has always been and is still enabled. In AutoImport Options, I removed the folder that contained the images, but haven't retested. Will do so after I finish this post.
5. The images appear when I am in the Audio mode.
6. The image filenames and paths reflect their actual locations on the disk: d:\images\image.jpg etc. The mp3 files are on e:
Again, what I do is select the names in the Album pane that I want to delete, then use Delete from Library.