I think you are missing what it wants to do.
Maybe it’s getting clearer when the FAQ is done.
Try this for a start:
If the player is open, tap on the downward chevron at the bottom to minimize it.
Now tap on the cogwheel icon bottom-right to open the settings.
Tap on ‘Source’ and make sure your primary music library is selected.
(If you have hidden your music library by disabling the checkbox ‘include in Dashboard’ in the preferences of the library, reverse that action now.)
Now tap on the Home icon at the bottom-left of Plexamp.
Now scroll a bit upwards until you see the ‘Stations’.
Tap on ‘Library Radio’.
If you know that already and want something more specific, try this:
tap on the magnifiying glass icon at the bottom (again with the player minmized).
put a part of the name of an artist into the search field
tap on the artist when it appears as a search result underneath
now tap on the artist radio icon 
You may experiment further with some of the other ‘Stations’
Try Style, Mood, or Decade radio.
Did you notice a pattern here? Basically, Plexamp is mainly about leaving the selection of the particular tracks to play up to Plex, but only give it some rough instructions about the stylistic direction.
