Hi Darren,
I might not be an expert on that one, but from I understood this is a two-step process: file registration (what you've already done via API) and file upload (what you need to do). You have to copy/upload a file to a physical library folder on disc. If you do it vice versa: i.e at first you upload/copy a new file to a library folder it will have the warning icon (brown exclamation sign):
It means: A file exists in the library folder on disc but there is no record about it in the DB i.e. in Media_File table. if you click on the warning icon you can create a record.
So just copy/upload your files. They should be stored in <Kentico>\<site name>\media\<library folder>.