As I just put in #suggestions, I'm very much in the camp of tactile, physically-realized crafting as an alternative to the 3x3 grid, and I wanted to make a thread where we could share ideas for how that could be manifested in a way that feels like you're really participating in the creation of your tools and other objects, without making the progress a tremendous slog.
My primary idea is for interactions to be based on directional key inputs, for example, hammering an axe head onto a stick could be DOWN > DOWN > DOWN, or something a little more complex like wooden tongs could be using the arrows to "wrap" rope around two sticks(UP > LEFT > RIGHT) and then pull tight(LEFT + RIGHT) and then tie(RIGHT CLICK). The ideal is that nothing should take up too many button inputs so as to be laborious, especially if it's an item that might be made very frequently, like knives.
I think anything likely to be made in bulk(like, for example, most blocks) should be allowed to be craftable in bulk, where the crafting process is treated as just 1 block, but spits out whatever number you set to make(limited by raw materials in one's inventory, of course).
I think the crafting "menu" could be converted into a button or similar, so that you can tell the game "I'm ready to craft now". Maybe having a mini-inventory to place items into, so that the game has a frame of reference for what you're trying to make. Alternatively, using the handbook as a conduit for it: "I have the materials to make a flint spear, I'm going to go into my handbook and click "craft" under "flint spear".
These are just some ideas, so please do share yours and feel free to critique!!!