Rather than post in 3 or 4 threads I felt like starting another one.
If you read the NPC dialogue, it turns out there are two types of Shards you can create for everything.
Bound (lower crafting level, fewer ingredients) and Unbound (higher Crafting level, more ingredients)
Unbound can of course then be traded/sold etc.
Putting a Shard on an item is a level one task (so it's very easy)
Crafting the shards is the part you need to level up for.
There are two empty chambers in the crafting area ,presumably these will be for Unbound Shards and Unbound items.