Question: We watched Beautiful Creatures last night, I've read the book and even I was confused at points. Extra ideas were added, large amounts were cut.

From memory

* Marilyn and Ama's characters were merged
* Macon was made a caster instead of an incubus
* Boo Radley didn't appear at all
* Ethan found the necklace at a different time
* Ethan played football instead of basketball
* Larkin didn't surprise us at the end
* Ethan's father didn't appear at all (this again led to a changed ending)
* The scene where Macon read Ethan's future didn't occur in the book
* The entire idea of Ethan losing his memory didn't happen in the book
* Emily and Ethan didn't date in the book

Compared with book adaptations such as Harry Potter and Twilight it seemed to change a massive amount from the book. Why is this?

Answer: 
I think it could boil down to any of several different reasons:

1. Writer of the original book was not involved in the making of the movie, and therefor the movie script takes different directions than the book.
2. Producer thinks they know better and forces divergent changes in the script. (Same could be said for the director, or as in #1, where the script writer diverges from the book.)
3. Time limitations. There is usually way too much in a book to portray on the screen (which is usually the reason for sequenced movie production ... besides the desire to make more money).
4. Sometimes there is no easy way to translate a book from page to screen. Production costs could figure in here somewhere.
5. Sometimes what someone understands while reading a book is not exactly what is happening. Two people could read a portion of the book and come up with two completely thoughts as to what is happening. When this gets up on the screen, it could be shown as a completely different third thing. I'm not saying this happened here, but interpretation plays a role in any production.

I'm sure there are a plethora of other reasons scripts could diverge from their book counterparts. Why exactly Beautiful Creatures diverged will probably remain a mystery along with all of the other movies out there which have taken the divergent plunge. Sometimes the changes make sense ... other times it leaves you scratching your head like you have done here.
This response is more then probably late, but majority of the big chunks that were cut would have EASILY pushed the movies rating over PG-13 standing the creators wanted. Though this isn't a big enough excuse for all the cuts I feel this PG-13 desire held back a fair bit of the book.