The ability to enable/disable showing iTunes purchases still exists, but it’s now in the iTunes app itself.
Launch the app and then click on the pull down which allows you to select iTunes listings like by artist, album.
In the picture below, tap the red Artists word just below the album art.
This will bring up this menu, scroll to the bottom,
and slide the Only Offline Music to the on position.
I found a program the other day called TuneUp that fixes all the song information (track title, album title & album art) for all your music in iTunes. I only tried the free 100 song version as I have already done most of my by hand now. But for the few albums I did do, it seemed to work reasonably well.
Although I didn’t get one album wrong. Unfortnatuly I didn’t realise this until after I had let iTunes change the album title. Oh well.