I want to be able to select a few albums and keep their status as NEW so they show up again under the "newly added button". Is there a way I can do this?
Currently no there isn't i'm afraid.
You could use a work around by moving those albums to a seperate folder and then set you date back on your pc. Generate the database then set the date correctly and do an update including that folder but it's not straight forward.
Would it work if I deleted the items from my music folder and then updated library with them in again?
Yes,it will work even if you delete the files.