A couple of playlist edit mockups for you to consider. Dont know how much of this is possible but…
The first one shows editing a playlist. The edit icons only appear when you hover over a playlist name (notice the highlight) or select it (notice I am hovering over a playlist that hasn’t been selected). Delete icon appears for all playlists and clicking it requires confirmation before the playlist is removed. If its a smart playlist the edit icon appears too. Clicking this puts you into a smart playlist wizard.
The second one shows how playlist items might be removed or added (here fireplay is showing the content of my “swing rocks” static playlist). Again the icons only appear when you hover over an item or select it. If the playlist selected is smart then only the add icon appears. Clicking “add” pops up a list of the static playlists from which you choose the one you want to add the item to. Multiple selects are possible. Clicking delete removes it from the current playlist
Of course this can all be supplemented by drag and drop.