Hey Ken,
We’ll need some information to make sense of your issues.
– What are your system specs (machine, OS, RAM, external hardware / drives, etc.)?
– What version of Final Cut are you running?
– Where do your Libraries and media live, on external drives or on your boot disk?
The degradation in usability suggests you may have some file system corruption, and should run Disk Utility on your drive(s) as a precautionary measure.
Cached files are deleted through the app (File -> Delete Generate Clip Files…)
– Do NOT go digging through the Library package! It’s a database and if you move / delete things in there through the Finder, you’re asking for problems.