I have pickaxes and axes but never really see anybody using them. Or any of the discoveries really. I'm only early game though, haven't progressed far. Is there something I'm missing? Maybe they need to have a higher IQ?

once you have them they will use them but you have to make sure they have the things they need to build the tools. you have to sample stone and sticks early on.  you can also place plants in the wastland for sticks. this seams like a bottleneck at first.  Trees will grow back after they are cut but rocks will not come back when mined. Personally i avoid getting the pickaxe early on and just sample the rocks I need until end game.

Gathering (sampling) the necessary resources is important, even more in the early game. Like "gusanoloco" said, you need sticks and stones for them

to create tools. I made the experience, that jungle trees have a higher chance of dropping sticks related to other biom trees, but not sure if it is just pure luck. Else the one-time desert trees is always usefull with min. 2 sticks.