Ability Mat 1 bottleneck... what am I doing wrong?

Just give it time. There are a lot of bottlenecks in the beginning that eventually just go away. At some point, you will end up with tens of thousands of these.

Exactly. I have plenty of Ability Mat 2 & 3...

Yes, I was taking abilities up to level 2. I think bcuz of the lightspeed bundles, I have been farming less (not sure what to farm, saving my crystals for relics rather than refreshes). Hopefully, this is just a temporary problem...

You're probably skipping your cantina farms/refreshes - I strongly recommend not doing that. Getting your cantina farms done opens you up to farm relic materials without distraction. If you have the crystal income to support it, make sure you're doing 3 cantina refreshes per day - every day. Doesn't matter so much what you're farming - every cantina node drops ability materials.