So is there a point where I should just stop picking up items?
Seems like every enemy drops 2-5 of them. I've already done away with the greys and I'm just throwing all the rest into the crafter. Is that what I should be doing with all this stuff? I haven't seen any reason to have money at this point in the game (lvl 15) so directly selling them doesn't seem beneficial.
Ignore everything below blue. Donate everything to your Crafter, then Enchanter. Maybe enchanter to 5-10 earlier because getting crafter to 20 will take you a very long time.
With no town portal mechanics, it isn't worth picking up everything.