1. You won't regret going to a 4-day work-week even if you do nothing that makes you money with the extra time. My wife did it over a year ago and she still talks about how it's the best thing ever and can never go back. We are a bit poorer, but quality of life went like 300x for that one extra weekend day.
2. Etsy is flooded, true, but it doesn't mean people still don't find you and buy your stuff if it's good and unique (and you put effort into learning how to do Etsy SEO). If you make something that no one else has, you can charge a proper amount for it, people will buy it and leave you great reviews.
We make nearly 6 figures on Etsy as a side-business across 3 different Etsy stores for crafts/handmade/digital goods we produce. I can tell you that we used to make a lot of money with our laser-cut wood shop when it started, it was a wonderful learning experience and trip, but after 2 years or so everyone and their dog had a laser cutter, ripped off our designs, and sold them for less than half of what we did (and they weren't making any money at those rates). We had a Chinese scam ring rip off our most expensive item featuring pictures of my wife's face in them and use them as facebook ads to try and sell our $500 item for $79.99 on pop-up stores. Nothing you can do about that, but it shows that we reached a success point to be targeted like that. There are so many niches and things you can make and sell on there it still blows our mind. People sell literal PDFs of a piece of paper with an image of a piggy bank repeated like 500 times that people buy, print out, and cross out 1 by 1 as they add $10 to their vacation fund knowing that at the end they'll have finally saved the $5k they need. These stores will have like 30k+ $3.99 sales for 20 minutes of work.
It sucks that you can't report shit stores, they are frustrating, but even though they are there, the long tail is real, you can find anything from any niche, the trick is finding out what people will type in that search bar that you actually make or can make, because that will filter out most of the crap.