The game is so much more massive than I ever expected. I can tell you that you're still super early in the game based on what you've found. There are many, many red tools and while you'll absolutely have favorites, there are definitely some that seem underwhelming until you find a specific situation or region where they excel.

There is a crazy huge amount of content and capability in the game, and if it seems like a slow burn for you now, IMHO that's because the game does a pretty good job of pacing new things so that you have time to evaluate and master each new piece of kit as it comes up.

The other thing about shards is that you have to sort of learn to find a balance with how much trap usage you employ; what seems to me to be the intended design (based purely on vibes) is that you mostly only use them against certain bosses/arena rooms or in situations where your needle can't easily work due to the terrain.

I thought similarly to you at first, with shards being a huge surplus and not necessary. I think this is an introduction period of sorts where you can get used to how the controls work and experiment freely. But then there were wide stretches of the game where I had a relative drought of them. Now that (I THINK??) I'm approaching the end, I've learned to use my shards reserve as a sort of measurement for whether I'm comfortable enough fighting in a certain situation. If it dips below half, I'm leaning too much on traps and need to take a step back and think harder about how to approach things with needle combat.

On the topic of yellow tools... I can definitely relate to the compass feeling mandatory, but there were several places for me where I had compelling reason to choose to forego it for something else. That was legitimately interesting and I don't have many other examples of games where that's possible. There are a bunch more yellow tools you'll find with more interesting effects as well. And eventually (being deliberately vague) you will reach a point where you won't feel like you're sacrificing as much to keep the compass equipped if you want. (Though there is also a point where you will have seen enough of the world that you won't need it, strictly speaking, because you either have the areas memorized or can navigate based on room shapes and major landmarks without your precise location.)

Godspeed, fellow hunter