Yes, exactly, but axes and swords would also be able to be made from ore's obviously. Bowls and water containers could be from clay, plant pots depending on the agriculture system when it comes. Generally we can see this system now in game for making bricks, or wood handles and stuff like that, even baskets and anything made from basketry. Though things made in tailoring would no longer be made from scavenged items, but rather from cotton that we would have to grow ourselves, and harvest, just as an example. We could still make sophisticated items, but there would be multiple skills involved, rather than just picking up a piece of shit off the ground and smacking it with a hammer a bunch of times.
I dont think scrap piles should ever deplete, rather the loot table will change somewhat instead. Personally I love to be able to pick up a car battery and a lava lamp and stick it in my tent, id stare at that shit for hours man! Also being
able to find some special shrooms in the forests (and forests re-added to the game too). But i guess i could go do that IRL with less hassle and better graphics!