When I Ctrl-O a song into an existing playlist, it is replaced by the songs that I add. How to add song(s) to playlist while retaining the existing playlist songs?

I have changed the Ctrl-O shortcut myself, and don't remember what it was used for originally, but try checking:
Preferences->Core->Enqueue Incoming files by default when...

In Playlist menu there's a couple of Add commands (location, files, directory, etc.), you can also drag'n'drop to a playlist anything from anywhere.