How would one go about making a block non-solid to items when they are in entity form (liked dropped on the ground) so that they pass right through the block, but the block will act solid when a player or mob comes in contact with it?

Not sure you can...you could certainly make a very thin, fully solid top surface and if an item collides with it, just reposition the item to below that barrier.

yea pretty sure this isn't in vanilla code anywhere, so your simple solution would be to make the block check for items close enough to it and move them where you want, similar to how a hopper grabs items above it.

 

other option may be to make your own collision code that checks specifically if the entities are itemstacks, but I don't think this would be very simple or worthwhile to get working...