data-recoveryitunesitunes-match
I've been thinking about weather to use iTunes match, but not for syncing to all devices as I'm happy with what I have on my iPhone and have iPod with all songs on.
What it would be useful for is to be able to download my library if my hard drive packs in or my computer is stolen.
Will iTunes match work in this way? will I be able to download all my songs and not just the ones purchased in iTunes?
I think the difference is in the second paragraph that you posted. In your situation, if you have bought less then 7,000 songs from iTunes, then the rest counts against the storage.
In other words, it looks to me that only the songs that you bought from the iTunes store will not count against your 25,000 song limit. All other songs will (whether bought from somewhere such as Amazon, or ripped from a cd) likely count against that limit.
Keep in mind that you can have more than one Apple ID with purchased music in a library and according to the FAQ - only the Apple ID paying for iTunes Match/Apple Music is exempted from the 25k song limit.
It's not clear whether Family Sharing is all considered "one Apple ID" so you might want to be sure you re-download all family songs under your Apple ID if you are running up against a limit.
Best Answer
If you enable iTunes Match, your entire library (up to 25.000) songs will be synced with your iCloud. So all your songs are in the iCloud. You can add a device to the iCloud and by so, all your music on the new device will be synced onto the new device. That's how iTunes Match works.
If you computer/hard drive gets stolen, you buy a new one and authorize it with you iCloud, it will sync once again on your new device.
So yes, you'll be able to download all your music stored in your iCloud onto new device.
As a matter of fact, even when the original device lost it's files, the songs are still stored in iCloud.
But be aware, the limit on devices is set on 10. So make sure you haven't add 10 devices already!
EDIT:
Proof of this is on the iTunes Match-page