If you drag a song or an album to the playlist, but happen to place it on top of the text or the album image of the "up next" song, nothing happens. If you could fix this, so the album is added just as if when you drop it a bit further down on the playlist, it would be great (as i do this intuitively all the time).

Same here!
I think we drag albums there because it's the largest location at the top of the playlist... and also this location normally shoudn't require to be too precise... That would allow any dragging in a flash to be always successful!