[Geoff Bacon]

Keeping them separate means you are talking of collections.

Setlists are normally used for a performance when you want to play a "small" number of songs in a particular order.
So, put all the songs into their own collection and choose that when looking at songs for that group.

When you want to create a setlist, show the filter and specify that group in the collection field
You can then just select songs specific to that collection.

If required, a song could be in both collectiosns but, if it is is likely to be changed, I would suggest you give each collection it's own version.
Song names need to be unique so put a small mnemonic at the end off the name e.g. _ch or _jazz or -ch and -jazz This means that even if a song is in both groups, they will have different file names (there are other ways to do this using name formatting but this is the simplest method for the number of files you are talking about).

When importing, you probably want to select "Use Filename as SongName" rather than "Guess..." (not quite sure the exact settings description)

Geoff