Best Way to create Backups ?

NeilC you don't airdrop the backup file as well as all the songs. You only need to airdrop the one backup file. That's the point of a (full) backup. If your backup file is in iCloud then you don't need to use airdrop at all. Inside ST3 on your iPhone, go to settings > restore backup. Now navigate through the file system from the file selector that pops up and find your backup file saved in iCloud. In theory this is all you need to do.

If you get problems using iCloud (because it's much slower sending data over the internet and could timeout, or for some other technical reason) then you could try the airdrop method. Airdrop will send a file directly from one Apple device to another Apple device over bluetooth and wifi. The trick is knowing what to do with the file once it arrives at its destination.

I feel that Apple is maintaining iTunes on PC for compatibility reasons and expect it will be discontinued at some point. Since they removed app-syncing, it's not all that useful anymore. What we really need is an iOS file manager, which unfortunately for PC users isn't officially available. Apple doesn't allow PC users to access app folders such as Stage Traxx's directly from Windows. That's why you're using iTunes File Sharing, which is Apple made and approved.

The process in ST3 is somewhat more complicated for the less tech-savvy users as @peter has designed ST3 to work hand-in-hand with iOS Files app. On the other hand, it isn't a bad thing to learn how the Files App works, as it will give you some superpowers on you iDevice as you're used to having as a PC user. I must say that Files is quite cumbersome and frustrating for an advanced user, but it is the only way you have to do certain things. In the old days of iOS devices there wasn't any Files App, but as it's becoming more capable as a computer replacement for some users it had to get this functionality eventually.

NeilC hi Neil,
Explanation.
ST3 has a folder on iPad in FOLDER, ON THIS IPAD, STAGE TRAXX 3.
All your imported files reside there, and yes you can copy and paste all those files in and out of this folder.
But ST3 has a full backup feature that packs absolutely everything in settings , once you create a full backup all your songs and database is within this file. This file is normally saved within the ST3 folder, so once you create this file go in to the ST3 folder find this file, and the easiest way to find it have your filter options set on DATE and LIST this will show you the full backup file on the top of the list, now long press it click SHARE, AIRDROP it now to your IPHONE 12 , when you get a prompt on iPhone choose ST3 folder on iPhone and save.
Open ST3 on iPhone go to settings and choose RESTORE BACKUP choose the full backup you saved in ST3 folder and now you will have an identical ST3 setup on both devices , your ST3 folder will contain exactly the same files in iPhone as your iPad now you can copy and paste these files if you need to edit them etc.
Danger with this system if you have two devices running differently and you are happy with this, but you need only some songs transferred then it’s better to create a folder put all needed files in this folder transfer this folder using AIRDROP but don’t place it in to ST3 folder as ST3 doesn’t deal with folders, just transfer this folder to DOWNLOADS on your new device, then select all files within this folder and move them to ST3 folder, then refresh your SONG list and now you have your selected songs on the new device without changing its operational preferences.
I know it’s awkward but I found AIRDROP doesn't like transferring multiple files, but it seems to work if it has 1 folder file with numerous files within it.
Hope this explains how ST3 manipulates data.
Cheers Damir

You have album art pictures because you dragged them into iTunes File Sharing so they got copied into that folder.
They should not cause any harm, nor cause an errors uploading to dropbox.

**** Forget about using dropbox for now.

You want to 1. Make a backup from INSIDE the ST3 program, which makes one separate file containing all songs and settings.

2. Transfer that backup file using iCloud or Airplay to iPhone. **** Forget about iTunes, dropbox for all of this.
3. Restore the backup onto your iPhone from within ST3. This will unpack the backup file and recreate all the songs in the ST3 folder on the iPhone.

Follow my exact steps in the earlier post. My procedure works and is complete for what you're trying to do. Forget Dropbox for now.

There's not much more we can say. Perhaps you need a video, but you won't get one today. But I think you are complicating things by thinking you need the PC, iTunes, or Dropbox for this process.

NeilC forget icloud and dropbox itunes, music, throw them out the window and just concentrate on things that work reliably and simply, well as simply as possible till this date.
Seems like developers are struggling to keep up with customers needs.
They can not seem to create something simple and reliable the two words are not in their vocabulary.

NeilC ST3 folder should only have ST3 files if you have contaminated it with unknown files this is probably causing an issue, move all those files that don’t belong to the appropriate place, then follow the full backup procedure and then transfer this file to your other devices to update them.
Read the instructions slowly, understand them, then step by step you will get there once you’ve done it it will all come clear and faster.
But don’t contaminate your ST3 folder because making full backups might not work.

All very good advice so far. I really don't have much to add. Except that maybe I should do a backup and restore video to explain it hands on how to do it.

I concur, stay away from Dropbox. Their Files integration is absolutely horrible. If you really want to stick with Dropbox, use their app to upload / download files. You can use the Share dialogue to send files to Dropbox or Share files in the Dropbox app with Stage Traxx.

Regarding pictures: They will not interfere with ST3 but are absolutely useless. Just delete them (after creating a backup).

The file with the ST3 icon from your last screenshot, that's the backup file. And this is the only file you need to store safely or transfer to another device.