Crafting is generally the only way to get new/better equipment, yes.
In my opinion, this game is totally worth it, but that's also because I'm cool with it's light-hearted tone and atypical structure. The game is not like other JRPGs where you have to save the world, restore peace etc. You play as an aspiring adventurer who's mother disappeared years ago and assumed to be dead. Totori is convinced her mother is alive somewhere, and has to become a recognized adventure to go and find out.
The game is about exploration/alchemy more than anything else, with the driving force of the game being it's unique time-management aspect. Anything you do in the game, going from place to place, crafting items etc. take a certain number of "days". Assignments you take on have deadlines, so you have to decide which tasks you can take on and which ones you shouldn't tackle. As you adventure, craft, complete assignments you earn "License Points", which allow you to Rank Up on your Adventurer's License. You have to reach a certain rank by the end of Year 4, Month 6, Day 1 (namely the Diamond Rank) in order to keep going, or you'll obtain a bad ending.
Compared to many other RPGs, the PS3 Atelier games are short, but this is because they're all about the endings. Atelier Totori has 10 different endings, each triggered by different flags. The game makes this a bit easier by giving a Clear Game save at the end that allows you to carry over money and equipped weapons/armor/accessories. I do recommend playing through the game once before following a guide to get all the other endings, as it'll be much easier to follow a guide once you have a feel for the game, plus starting out with more money and better equipment makes the process much easier.
So while I wholeheartedly recommend it, I do so with the strong disclaimer that it's very different from pretty much any JRPG you've (likely) played, and as such it is something of an acquired taste. I'm not trying to scare you off (I love the game and hope more people will try it), but I want to be upfront about what to expect.