The inventory limit is somewhat annoying, but not critical. Once I started scrapping all my junk (common vendor items, useless spare Breaker Swords) and useless ingredients, I never had a problem with it. If it's a straightforward fix, I'd of course recommend fixing the inventory limit, but it shouldn't be top-priority, frankly.
OTOH, I'd argue that either drop rates on crappy ingredients need to be upgraded, or the ingredients store needs reopened (which would make sense, because you'd still need to spelunk regularly for a handful of +X ingredients to get the BEST versions of things -- viva completionism). Either one is a far better solution than trying to re-jigger formulas, because frankly, I do like being able to have some +15 items while using lower-quality ingredients. If drop rate adjustment is the answer, then Fur Balls in particular should drop at least thrice as frequently, and I'd make the mid-range stuff -- crystals, other bulk rank 4 ingredients -- drop maybe 50-100% more often. If they want to leave the rare stuff rare, I'm indifferent; it's the same as the superfluous rare drops in every other RPG. Rank 4 gear is more than adequate for completing all game content; I can live with never building the +15 Spear of Onehitcoupdegraceoncthulu and matching armor set for Nagi, just as I was happy enough having just one suit of Adamant Armor in Final Fantasy IV.