We definitely are going to add more hut scenes and exploration. For fishing, we'll have an NPC explain it eventually, but for now I can explain it:
Hit C with the fishing rod equipped or Z next to water to auto-use the fishing rod. It will start fishing.
When it says there is something on the line hit C (or whatever button is shown next to the tooltip if you've changed controls).
This may catch a rusty axe, or it may say wait for it. If it says wait for it, then wait until it says Pull Now and hit C again. You keep doing this until it catches something (the more times this takes, the better the fish). If you hit C at the wrong time, the fish will get away.
