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Since there are many different ways to organize music, here is my simple guide which will guarantee to work with Kodi.

NOTE: Other methods will of course work, this is just a guide to "best practice"

File naming
C:\Music\Artistname\Albumname(year)\01-artist-track.mp3
C:\Music\Artistname\Albumname(year)\02-artist-track.mp3

(add "C:\Music" as a source in kodi)

Tagging
Use musicbrainz picard to tag all your music.
Options: use v2.4 id3v2 tags, remove all other tags, save folder.jpg as the album cover with the fanart.tv plugin for good quality local covers

Kodi options
Enable "fetch additional information during lookups"
Use universal artist and album scraper
untick "include artists who appear only on compilations"