Need clarification with smart playlist in Apple Music

I decided to make smart playlist with loved songs. I don’t add a lot of music to my library. After I created playlist, there is only few songs which in my library. Is it possible to include songs outside my library or does it need to be added to my library first?

I’m new to smart playlists, folders etc. However I find easier to create smart groups or smart rules in DEVONthink than in Finder or Apple Music.

P.S Accessibility changed in create topic window, so now I can’t choose category or tags. If I try to navigate in these filters to choose which I want, for the most time random categories will be added. Can someone edit to software category instead?

Pretty sure you have to add to your library…which allows people to have a music ‘library’ that is not altered by if you ‘love’ a song or not

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I like my library to be made of complete albums, so I have a ‘smart’ album library that excludes anything with the grouping description of ‘incomplete albums’ and if I love an individual song and add it to my library I simply add this tag to it - hope that makes sense?

I just add lots of songs to my library but I have downloaded very little.