"Update Library (from Tags)" does not "update", it appears to "merge" instead
Artist is list field so it may just be adding to the list in the database instead of overwriting it.
Kind of makes sense since you are updating tags and not re-importing. I don't know though.
deleting an album from the library and allowing MC to reimport it persists the old metadata
You may not be completely removing the album from the library.
Items can be completely removed by making a smartlist with a rule of ~d=r and deleting the files again from there.
All albums are displayed as "Various Artists" regardless of what the Album Artist tag actually contains
Keep in mind MC uses the Artist field and "Album Artist" field.
"Contributing Artists" and Artists are typically the same thing.
Just some software calls it Contributing Artists (like windows) and some call it Artist (like MC)
If your Albums aren't showing up in MC correctly, have a look at the individual files in an album and check the Artist and Album Artist fields.
It's always possible you have an issue with one of your views that causes them to display in an undesired way.
It may be useful for you to post what software you are using to edit your tags outside MC as well as what you are trying to accomplish.
Different players and tagging software use different naming conventions and typically only a small number of fields are compatible between by default.
Album, Artist, and Album Artist should not be having issues though.
Also what file types are you using? FLAC and mp3 can store all fields in the file where other file types only store some fields in the file and the rest in the database only.