Easier mining in terraria? My wrist is killing me!

You're not missing anything. It's one of Terraria's flaws on PC.

For digging sideways, there's really nothing you can do.

For digging down, you can dig a hole 2 wide without moving your mouse by placing the cursor near your feet and moving your character back and forth. If it needs to be wider, just start at the top of your 2 wide hole with the cursor at your feet and dig down one column at a time.

The upcoming pc update may do something to help this situation, and will at the least have a rocket launcher weapon which could possibly be used for easier sideways tunneling.

I've long had issues with my wrists. I've found that using a trackball type device allows me to mouse much longer with less issues from usage compared to a standard mouse. The trackball doesn't have to be a big trackball. The best mousing trackball device I ever found was the Microsoft Trackball Mouse. It places a trackball under your thumb, making for incredibly ergonomic mousing. While they are no longer produced, Logitech makes a very similar design (check out Logitech M570 Wireless Trackball and similar devices) which moves the location of the trackball slightly. This allows them to avoid patent trouble with Microsoft, but it also reduces the "perfect" ergonomic fit of the Microsoft mouse to merely a "good" ergonomic layout. The plus side is the Logitech design is still in production, so it only costs $50, unlike the Microsoft model which is out of production and what few are available costs $350 or more.

A comfortable mouse to use is very important when you have wrist issues, so I'd recommend finding the most comfortable/best fit ergonomically for you, so you can enjoy using your PC even if what you are interested in using has mousing heavy tasks.

This might not be what you where looking for and requires some budget but it really does the trick on ergonomic gaming as for all Razer products.

http://www.razerzone.com/gaming-keyboards-keypads/razer-nostromo

This keypad can hold plenty macro's so you could program it to move the cursor up or down a block by pressing a button. You can also play the whole game with just one hand since it has 3 settings it holds almost as much buttons as your keyboard and they can all hold a macro or a single key stroke. Or you could switch when your arm is starting to strain. I guess it takes some getting used to but once you can get along with it it's heaven.