It is a bit overwhelming but I think the game is really good at drip feeding the mechanics so you're not overwhelmed! In terms of advice: do all the side quests, keep an eye on affinity charts to see how you can fill them in as fast as possible, and I honestly would be too bothered about awakening a huge amount of Blades on Rex or party member No.2 when No.4 and especially No.5 will be able to make better use of them. From my own experience getting to grips with everything in the first three chapters can be a little rough, but the level curve is kind to you early game.I’ve just started Xenoblade Chronicles 2, bought it as a Christmas gift for myself. So far the combat system together with all the details regarding blades and drivers are a bit overwhelming..but I’m already hooked. Any tips would be much appreciated!
I would also recommend YouTube tutorials on any mechanics you're struggling with because the in-game tutorials are awful and don't tell you about loads of secondary effects that are happening.
And have fun! It's an amazing RPG.