You can certainly use BeoPlayer to edit the music on the BeoSound 5. I did this initially when I bought my BeoSound 5. I just find BeoPlayer to be rather slow and cumbersome. ITunes is much faster and easier for editing, and iTunes give you more control than does BeoPlayer. However, iTunes cannot edit direclty to the BeoSound 5 as BeoPlayer does. It sounds like the upcoming ripping drive might be ideal for you if you're not comfortable with iTunes.
Don't get discouraged. The BeoSound 5 shows all the flaws of incorrect tagging and low resolution cover art. After I got mine, it took me WEEKS to painstakingly re-edit the tags via BeoPlayer and to replace the cover art. Mind you that this was due to my own laziness of years of neglect in properly tagging my music. Now that it's all perfect, I can truly enjoy my BeoSound 5 and appreciate it all the more. I suppose the appreciation can be similar to that of re-waxing one's own Barbour wax coat rather than sending it back to the factory for re-waxing. It makes it more personal.
Once you have the tags corrected, you'll want to make a backup copy. I suggest connecting an exernal hardrive and a mouse and keyboard directly to the BeoMaster 5 to do this. You just go into the service mode on the BeoSound 5, locate the files, and copy them to the external harddrive. You can also have BeoPlayer create a copy on your computer's harddrive.