How to Copy Music to iPhone Using iTunes 11 – Step-by-Step Guide

What you refer to as "iTunes mode" is actually a separate application called iTunes. The only way to get back is to relaunch the iPod app. If you have a multitasking-capable device, you can double tap on the home button and the iPod app will be there as it was the most recently used app.

These files are not, in fact, encrypted. The id3 tags are still intact. If you re-add the files to iTunes, the proper names and artists should show up, assuming they were tagged correctly in the first place.

If you have "copy files to iTunes media folder when adding to library" and "Keep iTunes Media Folder Organized" checked in advanced preferences, it should rename the files and put them in folders by artist in your music folder when you add the files to iTunes.