So I'm about 8 hrs in this game and I'm really enjoying my time playing it so far. But I realized I skipped some trade quests because I didnt know you can you do that by pressing Y... Woops

So I did one and I sort of don't want to do another one. The fetch item/monster hunting quests are more fun to play than the trade quests. Unlike the trade quests these quests let you complete the objective without requiring you to return to the NPC. Trade quests make you find another NPC at a ceraim place but then you have to find them at the right time. And then you have to trade and go back to the NPC. Its much more involved but it also more intrusive to the game flow. 

So can I just skip most of these quests and be fine in the game? Or are there really good rewards for most of these? What do Xenoblade veterans here think!

PS: The combat system is really fun! I wish I could see my other teammate's arts cooldown though so I know when to use Break better.

You will be able to skip most in the game without much reprucussion. It may affect your affinity in some regions which if you want to unlock additional skill trees you will need to nearly max them out but those too are not detrimental to beating the game.

Ok that's good to hear! And I'm guessing I can always go back and complete these if I decide to unlock more skills?

It's okay to skip a majority of them. I know because I've had no choice but to skip them. When I had started playing, I had the crappiest TV money could buy. It was so blurry, I couldn't see anything. I couldn't read text so I didn't know about the quests, nor did I know about Gem Crafting, nor did I know that I could use instant transport to other areas. I WALKED BACK EVERY STEP!!! But now I'm about 48 hours in at level 65 and I'm doing fine.

I'm not going to tell you to skip them because you might get a lot out of them. There are tons of them to do and you'll get tons of money and EXP as you get later in the game. Ultimately, it won't kill you to skip them.

Well, they can make another side activity later easier but honestly, 80-90% of side quests in XC can be safely ignored. There are some good ones but most are squirreled away behind the really mundane ones and that blasted town affinity system.

Most side quests can be safely ignored unless you want to do a perfectionist run ...

I guess that's true. I don't play RPG often and wasn't quite sure how Xenoblade rewards them like with valuable items, stats, or major exp reward.

You can get away without ever trading.

It can be a life saver when you are doing sidequests, such as fetch quests, and when you're trying to complete your collectapedia.

If you do a lot of the side quests really early you'll easily be leveled much higher than what the developers probably intended it to be ... 

Other than that quests give relatively less EXP as you move on to higher levels and there's no point in doing side quests minimalistically speaking unless you want extra skill trees ... 

Sometimes there's good equipment to be had or somewhat more involved backstories but I don't think it's worth messing to increase the affinity if your strapped for time ...

With XC the sidequests aren't that interesting.  There are a few but not enough.  And the rewards aren't that interesting.  Now, if you play XCX next (assuming you haven't already), totally different.  Side content is both good (normal missions and affinity missions) and also imo playing a good number as you go is essential to having the best experience.