You need to be on WiFi. Open a desktop browser and point it to the URL that the app gives you in the Upload tab or get the Tiny Loader Mac app (http://www.catnapgames.com/tiny-loader/) to just drag & drop files and folders - it finds your phone automatically using Bonjour.
If you still have problems please msg me directly or tweet @catnapgames, thanks.
Ah, no real playlists, it's really just folders. You can swipe left on library items to "enqueue", that's about it. As for loading music you could try dragging the contents of ~/Music/iTunes/iTunes Media/Music onto the Loader.. I've tested with quite large folders. Moving from the iPhone Music app is not supported, I might look into that later.
If you still have problems please msg me directly or tweet @catnapgames, thanks.