First, everything is fair game on step 1, even the stuff that seems like it won't be. Don't fall into the trap of thinking "not high yield" is the same as "not tested at all." If you want to score really high, then everything is high yield.
When I started M1 I would make anki decks that basically used every single word from every single slide of lecture. I would make a new deck for each block (systems based curriculum) and then tags for subject (anatomy, histology, etc) and finally tags by individual lecture titles (ie. "upperextremity1"). Each card would therefore have 3-4 tags.
Making cards was done by opening pdfs of the lectures on half the screen and the add material anki window on the other. Lots of ctrl c/ctrl v. The old version of anki had a nice Cloze function where you highlight some text, press F9, and it would create a blank where you had just highlighted, and automatically create the back of the with all of the previous text and your highlighted text in blue. Got to the point I could convert a 45 minute lecture to anki cards in a little over an hour. I would also screengrab pics of the slides for any charts/illustrations and add those to the back of each card (forgot the speed keys). The new version has more options but I liked the old version because of how fast I could convert stuff. Usually each block I would end up with 4000-5000 cards. That sounds like a lot, but remember these are little tiny bits of info, testable minutiae, etc. Often I would turn one sentence into 3 or 4 cards, each one excerpting a different testable fact. Over the course of reviews, these cards would be spaced apart from one another.
Intervals will greatly depend on your curriculum and time between exams. I liked the defaults for the old version (soon, 1 day, 3 days, 5 days) and felt they worked well with our 5-6 week blocks. I'm not a fan of the newer version with 1m, 10m, 3d defaults -- takes forever to get through stuff. You can still download the old versions on the anki site but you have to dig for them.
I originally planned to keep up with all my cards as a way of doing board prep, but this never really happened. Even if I'd been mentally able to keep making cards for everything (quit that after a few blocks as it was soul crushing), it would have been 25,000+ cards PER YEAR. No way I would have been able to keep reviewing all of that! Thankfully there is a lot of repetition in m1/m2 which will help with long term retention.