So I've played a couple nights for like 30-40 mins and have a fishing rod and net and 2 people on an island and all I can do is catch bugs, try to catch fish (I need a fishing guide I don't understand how the fishing mini-game works here and haven't caught anything) and pick up some stuff. Oh and I just made an axe so I can craft more. Meanwhile have about 1700 nook points and need 5000 to advance I guess?
Since this is my first AC game:
Welcome to Animal Crossing!

-Is the game progression loop just "here is how many nook points you need to advance to the next stage which opens up more gameplay to do" -> "do what you can do daily to save up and turn in until you hit the nook points goal" -> repeat back to the start part?
Early part of the game is very Nook Miles-centric. Basically what they did is make the first week or so a tutorial with 2-3 different segments gated by Nook Miles. Eventually, once you have all your houses built and Resident Services upgraded, it becomes a "normal" AC game with some tweaks.
The game loop at that point is gain bells and Miles, and convert those into the various goals you've given yourself to accomplish. For me this is upgrading my house by paying my mortgage, buying new furniture sets and things to craft to customize my house and island, and build various expensive public works such as bridges and ramps. The museum is also a gameplay loop unto itself.
-Has AC always mostly been a crafting game where you go and get mats and craft stuff? Not a big fan of the survival crafting genre, so dunno how long I'll stick with this.
No, it's new to this game. However, the rationalization given in an interview the developers gave in the Washington Post makes sense. Basically, since AC is real-time, and shops close for the night, people who played later (or early before the shops opened) were kinda screwed. The last game had a bandaid solution, but by introducing crafting, players can create their own tools and furniture without the need for a shop. They can gather resources on their own island, or spend Nook Miles to scavenge them elsewhere. And if a player doesn't have Nook Miles, there's a bottomless series of tasks that can be grinded for them.
Where as past Animal Crossing games truly did run out of things to do after a certain point, that doesn't seem to be the case here. It's still open-ended, you're defining your own goals, but you're never lacking for clear progression either. I'd suggest sticking with it, as crafting does get slightly more optional (if you want it to) after a certain point, and while I was a crafting skeptic too, I've been convinced by the implementation here.