I have been trying to use my 64GB flash drives and they keep getting hung up.  Then the music stops playing.  The entire library doesn't load.  The drives are formatted to FAT32 and it is under the folder file limit.  This is so frustrating.  Can I delete the previous files stored on the headunit?

You're probably aware that a 32GB drive is the largest with manufacturer support.  And that is all the FAT32 formating technically supports.  But you appear to be aware of that if you are using a 64GB drive formatted FAT32.

My understanding is that one of the snafus of using a larger than 32GB drive formatted FAT32 is that you can't modify it on the fly.  You have to load the entire drive and leave it that way.  You have to erase the drive completely and reload completely for every change to the file structure.

Ive read elsewhere that some people have had issues with USB 3.0 flash drives, and having better success with 2.0. 

Is your drive perhaps 3.0?