I have archived editions of SNL Celebrity Jeopardy that take up a lot of room in grid view. These are already part of a playlist; It would make sense to hide them in the top grid, and just show a thumbnail for the playlist instead 
I’d love to see playlists alongside other entries in Library tab. Especially replacing the members of the playlist, collapsing them into a single unit.
Just catching up on this suggestion… this is exactly what collections will do.
Collections are aiming at how you organize your library while playlists are more focused on how you’re playing some media (less about how it’s organized in your library).
Therefore I’m considering the underlying request to be implemented.
2021 clean-up: underlying request has been implemented – the purpose of collections is linked to organizing items in your library while playlists are more focusing on how things are being played (in few words… I’m sure there’s a more conclusive explanation)