I'm sorry you haven't found the plugin suits your needs. But I can answer your questions so you can see that just because it doesn't suit you, doesn't mean it's useless to everyone!
1. It uses both mp3 and ogg in order to be completely cross browser compatible. It's part of why this player works on all browsers, and devices including iPhone/iPad. Further, converting your mp3s to ogg is extremely quick and easy. There are heaps of free conversion tools available - run a search. Personally, I use Goldwave. which is free, easy to use, and converts the files in a few seconds. I think you can even run a batch convert if you have a large number of files.
2. Cover Art > the player was designed for use by musicians and bands, and my research showed they really wanted cover art. You could quite easily remove it by adjusting a few lines of code in the plugin files. That said, it's not a bad suggestion for future version to include the ability to display without artwork if none is uploaded.
3. Multiple Playlists > this lite (free) version of the player just allows 1 instance of the player with 1 playlist. Large percentage of users are using the player to demo a list of their own songs/music so this is perfectly adequate for the main target audience. However, for users like yourself with more advanced needs, a Pro Version of the player is available with a main feature being that you can create multiple playlists and embed multiple players in your site.
I trust this answers your questions adequately and is useful for other users who stumble across this thread.
Thank you for your feedback on the plugin.