Pretty sure that you can't make use of the coverflow in the iTunes remote as it would take a long time to send all of the coverarts to your phone.
You could use iTunes DJ if you're looking to allow multiple iPhone uses to add and edit playlists, haven't looked into it much myself but I know that you can one as a 'master' user and that means that you can add and remove songs yourself, whilst others can add songs and vote for songs so they move up the playlist.