I'd start with adjusting the cable. Biting from 1 inch out doesn't seem like enough to fully disengage. Had similar symptoms a while ago with 1st and 2nd at low speeds, and struggled to find neutral. Adjusting the cable did the trick.
there was a thread on this a few weeks ago with a multitude of things that it could be.
just below max seems to be the sweet spot for me but YMMV. And any slack in the gear change lever will also cause sloppy gear changes.
I noticed loads of used chain lube that had gone to a thick sticky mess around the front sprocket,
I dont know how it could either but it worked. Theres was load of really thick clumps of old chain lube in there, the bike accelerates better now as well as gear changes in 1st and 2nd being easier.
There's a little spring behind the gear shaft cover, it weakens over time. I found If I changed it the gear change would be nice and slick again until it weakened again. The local Yamaha mechanic used to squeeze 2 springs in. I think it's job is to align the shift shaft ready for the next gear change, as it weakens it doesn't work so well. I always meant to find a supplier to get a slightly stronger spring.