oh! I thought it was something to do with crafting mats. like there were literal mats in the game that could upgrade your weapons. i get it now.
another stupid questions - whats with the switch axe? it seems it does a lot more damage in sword mode because of the phials, so why would you ever use the axe?
"This hard kick button in a fighting game does more damage than the medium kick button, why would I ever use the medium kick?"
My friend who just started the game (and went straight for the SA) was having trouble until he realized he wasn't playing DMC, and the movesets are more important than any kind of 'combos'. There might be moves in axe mode that can more consistently and safely hit the parts you want.
Also (DISCLAIMER: I don't use the switchaxe ever) as far as I know the sword mode restricts your movement, and phials aren't always necessarily more damage. I see people mentioning that the power phial is important because it specifically IS more damage. But if it's an element (phials have elements, right?) that a monster isn't vulnerable to, it might as well be doing nothing.