Latest update on the process of crafting: ingredients. Ignore the quality box on the right, as it's still being developed.
You can see that available ingredients to use changes depending on the category and item you select. The first picture is an example of what it is like to craft an item with varying potency. With this screen, you can see items like potions require specific tools, but you can use any combination of ingredients. In the results box to the right, you will see the quality and usefulness of the resulting item when you click on any ingredient. The quality of the ingredient will affect the resulting item. So, potions made with powerful herbs will have powerful healing qualities. Weapons made with strong metals will be more damaging in combat, while armor will be tougher in defense. Food made with good quality ingredients will fill you up more.
The second screen shows what it looks like when you're missing an ingredient, do not have an ingredient, or do not have the right tool. It also shows the type of items you can craft that have more specific requirements, such as a specific number of a general resource like wood or stone.
The third screen shows what it looks like when an item needs only one of some general resources like wood or stone. Some screens may show additional optional ingredients you can add. Note that quality is very important for some things, and not as much for others. The quality of the house you build, currently, does not provide any penalties or benefits right now, so it's likely you will not see a quality result for that type of craft at all. Despite the intermixing between items where quality matters and items where it doesn't, I still wanted to have one, uniform, recognizable interface where everything you want to do can be done for crafting.
In addition I want to mention I plan for there to be an 'invention' type option where you will have full access to your inventory of ingredients to make an item of whatever you want. You will be able to name it and describe it - however this item will have no mechanical use. It will be for roleplay items only, and just gives those who enjoy making new things, or that cannot find items in game to make that fit their roleplay, an open platform for creativity that supports their story.