Regarding Offline Playlists
Deepbot makes use of the Youtube embedded player when playing music requests by viewers and music added manually to the playlist. As such any music you have stored on your system won't be played via the music player in Deepbot. This is the reason why your music cannot be located in the program. The easiest thing to do would be to find a copy someone has uploaded to youtube and add it to the playlist that way. If you have your own private playlist though, don't have song requests enabled and want Deepbot to display the song you are currently playing via the !song command, you can use iTunes which should scobble the information for use in Deepbot.
As to how the playlist file looks, you can see an example below
default.plst,18,5
1,iUB3cgFL-a4,318,ianchandler1990,The Comedown Robotsonics
And what each part means
<Playlist Name>, <Number of Songs In Playlist>, <Current Position In Playlist>
<Song Position>, <Youtube V= Variable>, <Song Length>,<Requester>,<Video Name>
The playlist itself is in a .plst format. If you add songs via Deepbot and want to save it for future use simply press "Save Offline Playlist" and choose a file name of your choosing. The default location for these files is in the "Playlist" folder which can be found in the folder where your Deepbot is located.
With Regards To Youtube Time Limit
Yes, there is a limit on a per video basis. I believe this is 20 minutes max. I don't believe there is a limit to the amount of songs you can have in the playlist but obviously the bigger the playlist the longer it will take to initially load.