Many, many items are Prime eligible, but not all. As far as the books in the lending library, I have not seen many mainstream titles available at all, but I haven't looked in a while. You also get free video streaming, but with a very limited selection of shows & movies.
Do this - go back to the items you just paid $35 shipping on and see if they say "Prime eligible". It would be clearly marked.
Having Prime changes your buying habits to be sure. I think nothing of placing 2 or 3 separate orders during Christmas time because I no longer have to save up my purchases to qualify for free super-saver shipping. But that's what Amazon is counting on.
Often you'll find cheaper prices online than other places, but once shipping is factored in it may not be as much of a bargain, if at all. With Prime that factor is removed so many things are definitely cheaper online, even some you wouldn't normally think to buy online. If you do much online shopping at all Prime may very well be worth it to you, even at the new higher $99 price.
2010 Cougar 322 QBS
2008 Chevy Silverado 2500HD LMM CC/SB 4x4 LTZ
Pullrite SuperGlide 18K