I try to connect the iPhone remote to my iTunes library. I do add library, then the phone comes up in iTunes and I type in the passcode. It tells me your remote is now able to control iTunes. Then the spinning wheel comes up and after like 20 seconds, it tells me that it can't find my library. HELP???

You might have lost connection to your home Wi-Fi network if that may be the case.
Have the settings changed to have Remote connected to your iTunes library all the time; on the other hand, keeping it connected to iTunes via Wi-Fi will decrease battery life and you might have to recharge it constantly.