For your local playlists, you should do whatever’s most convenient for the way that you plan to listen to the music! The approach that you described in your first post (grouping by covers and genres) seems reasonable and is probably similar to what I’d do in the same situation.
If you’re asking about how these should be added to the MusicBrainz database, that’s a bit trickier. I think that the consensus is that playlists usually shouldn’t be added as releases:
One good option would be adding each video as a single like @RustyNova suggested. I think it can be okay to add a YouTube playlist as a release in narrow cases, like if all the songs were uploaded at once and it’s really intended to function as an album. I’d avoid doing that for a playlist that functions more as a collection, where songs are being added over time, though.