Yeah, I've been doing the same thing and it makes things a real slog. I passed the time by growing giant produce and getting crop levels to 9 (haven't reached smithing skill for the top scythe yet - think without it, that's as good as I can get).
I used a more reasonable variant of the "sleep" trick where I have the character in my party, tend to my crops in the morning and then go to sleep around 8ish. Doesn't go as quick, but when you skip the festivals and running around talking to people it goes much more quickly than normal.
When I get tired of that, I go to
since you can explore it without actually unlocking the 3rd arc. I figure that way at least my equipment and levels will be decent for the post-game.
I understand what they tried to do with the event system, but it just isn't very well balanced. It does break things up nicely between the festivals when you're not event-hunting -- but then, they probably should've had fewer festivals. There are what, about 5-6 a month or more? Sometimes it seems like every other day is "today's a festival!" or "tomorrow's a festival!"