I am having this exact same problem. It took me forever to find this post and see that others were also having it. (I figured they were; I just couldn't phrase my search terms right to get the results.)
I'm on a Mac, with the latest iTunes (12.1.2.27) and iOS 8.3 and this is definitely still happening.
One thing I've noticed, it only seems to affect songs purchased from the iTunes store. I can successfully change the artist information on songs I've purchased elsewhere or imported myself and it shows up properly on my iPhone.
I really hope this gets fixed soon; it's driving me crazy!