I'm using Tilemill 2 and trying to set bounds or extents in order to reduce file size but I can't figure where to do that. I'm also getting a 422 error when trying to upload to my mapbox account and am guessing that is a file size error but I don't actually know.
You can't set bounds or extents in TM2 by design. Instead the idea is to export your datasources as vector tiles and style them in TM2. You would then upload the vector tiles (or use Mapbox vector tiles) and also upload the stylesheet. Then all image tile rendering is done on Mapbox servers on the fly. You would no longer have to render your own image tiles, worry about file sizes, or wait a long time for slow renders of huge areas.
This also opens up possibilities for anyone to style maps of the entire world without worrying about all the slowness you would experience in Tilemill 1.
That's the idea, some of these pieces are in place but we're still working on building out the rest of it. TM2 is still not ready for public consumption. It's getting there, we have some recent renewed efforts, you'll hear about it when it's ready.
In the mean time it's public to try out. Sorry about the misleading "Upload" button, we use that internally and it broke recently becoming exposed to everyone. You get an error because you don't have permission to do those uploads.
Hope that helps, Aaron.