Hiding iTunes Store purchases was always a hassle. You had to go to your Purchased list, find what you want to hide, and click the x on the corner of an icon to hide the item. If you download a lot of free stuff on iTunes, you probably want to do this to keep your library clear, at least if you used iTunes in the Cloud before, to show your purchases in your library.
Apple has simplified this task in iTunes 12.2. If you see something in your iTunes library – when you have iCloud Music Library turned on, and showing your purchases, together with what’s physically in your library – you can hide if quickly from within iTunes.
To do this, right-click on an item that you want to hide and choose Delete. Since you can’t delete purchased tracks – really, you can’t ever delete them – iTunes displays a dialog asking if you want to hide the item.
Click Hide Song (or whatever type of media you’re hiding), and iTunes will remove it from your library and set it as hidden.
You can always un-hide any iTunes purchases by going to your Account Info page, then the iTunes in the Cloud section. After Hidden Purchases, click Manage, and you’ll be able to show anything you’ve hidden.