I've tried and tried and made slight progress but I think I'm now going to give up and go back down the route of just creating a 'playlist folder' containing duplicate tracks which I know works, there will always be plenty of room on the SD card, just goes against the grain...
Anyhow just for the update, the playlist below which sits on the SD and has the artists below it now shows the listed tracks rather than the 'no playable files' message.
BUT unfortunately from the list layout below it always only shows the last song, and then when I click on it I now see 'file not found'.
Oh well....
#EXTM3U
#EXTINF:315,Quartz - French 79
/Volumes/VW Music/French 79/Joshua/Quartz.mp3
#EXTINF:429,The Year After - French 79
/Volumes/VW Music/French 79/Joshua/The Year After.mp3