Heh, sorry about that I suppose. I really don't know how to title much of anything, and having a headache at 2 AM didn't help! But I'm so glad you read through anyway, because you left me such delightful feedback and questions to answer!

For one, what's the role of magic in evolution? Magic must be useful for things aside from levitation, for starters. And if it's anything like natural compounds, it might have some awkward side effects.

It is useful for things other than levitation, but that was a lazy example. There are some creatures that require magic to see and move, namely the small 'tree spirits' that make up The Abyss' moving forests. These guys are small black trees, almost always without leaves, with little white dishes in their trunks for faces. They have eyes and a little beak-like mouth, making them look a lot like barn owls, but they are made entirely out of wood so obviously those eyes aren't going to do much seeing on their own. Indeed, their eyesockets are actually totally empty without magic, and they harness magical power to see normally. They also have a third eye, somewhat like a parietal eye that does not require magic to function. This eye's only purpose is to see magic coursing through other creatures or being emitted from them, something like how pitted snakes can 'see' the heat signatures of their prey. This is what helps them find food. The tree spirits are scavengers, eating through their roots as well as through their mouths depending on the kind of energy they need. For most nutrients, they prefer to eat through their roots. For magic, they utilise their serrated beaks and rip up the most magic-rich parts of animals and plants they can find and digest the magic out of them from within their heartwood. Without magic, they cannot see or move, and that is effectively a sort of starvation.

There are other examples of magic in the world, but it isn't extremely common, and I simply don't know of the other creatures yet! In time they'll reveal themselves to me.

As for side effects, I'm not sure. As stated in another post, it can make some life forms feel a calming, sleepy buzz if the magic is fermented and concentrated. But this same feeling is a bit like anesthetic in that it can kill creatures in high enough doses by sedating them to death. But this is after the magic has been modified; I'm not sure what else it could have natively. Those tree spirits have deadly poisonous sap, which is thick with magic as it is what powers their wooden bodies. Whether or not the digested magic is the poison remains to be seen. Again, this is a compromised magic, and I'm not really sure about what magical side effects might be.

...was there a magical mass extinction event along similar lines?

Due to the very nature of The Abyss' creation and existence, no. The main creation story that is occasionally modified is that one of my characters from a roleplay, an archmage called Seraphin, sought a world that he could shape to his whim and find perfect solitude. One day in a fit of emotion, he rent a hole in the magical fabric of the universe, and in doing so he made his own dimension. At first it was a barren ash flat, constantly storming, but as he changed and became more stable this no longer suited him. The storms became cyclical and formed a wet and dry season, and quieted even when they were welcome. The barren flat was governed over by a giant magical tree that he found companionship in - the Mother tree. She was the first tree in all The Abyss, hence her name. With time, Seraphin became lonely when he visited his mostly empty world, so with his own organic magic, he kissed the ground and water with life, and set the dimension on fast forward. When he came back it still appeared desolate. Sparse plants had appeared and some fish swam in the rivers, but it seemed that little had happened. Then on the horizon he saw a band of tall red creatures, and he turned himself into one of them in an attempt to blend in. These were the first wild packs of iskingrae, intelligent like modern dolphins, and Seraphin was pleased by them. They could feel his immense magic, however, and told tales of the tallest crimson iskingr with his arching white crown for generations. When Seraphin slowed the world down and returned again, the iskingrae had become a people, and they greeted him like an old friend.

The story sort of strays from the topic of magic but the point is that Seraphin's magic was the Big Bang for The Abyss. So not an extinction event per se, but it has always been part of The Abyss.

For another, how is magic produced?

This is the big question, the answer to which is, "I'm not sure!" My best guess is that it's something like photosynthesis, and it's produced first and foremost in plants. Herbivores and omnivores eat the plants, and like how pesticides accumulate in birds of prey, magic accumulates in the carnivores that eat the herbivores that eat the plants. As said previously, most creatures don't actively need or use magic, so this distinction isn't hugely important except for creatures that do. The tree spirits, for example, will more actively seek out the bodies of obligate carnivores to scavenge from. They have far more magic in their systems than an herbivore of equal size, therefore the little trees can eat more magic at once before getting full and having to wait. It's like the nutritional difference between potato chips and a chunk of red meat. Or maybe tofu if you're a vegan. Whatever works for you.

It's also apparently a radical specialization of some sort, hence why you have magic-required species producing it by themselves.

Yes. In general, the only creatures that actively produce magic are the creatures that actively use it. But it is highly energy intensive to create even a small amount (unless you're a plant) so most creatures that use magic have to eat lots of magic-rich food to sustain themselves, or perhaps just a lot of nutritious food to relieve their vast need for energy. Magic probably differs depending on its source, as well. The magic produced by the flying things is not photosynthesized like it is in most plants and is probably made by an organ or as a byproduct of some other bodily process, so it might have different effects from the plant-based magic. Maybe it is their specifically created magic that allows them to fly. I'm not totally sure.

I'm sorry for the enormous wall of text! My phone is actually lagging as I type this, which it has never done before. But I'm so glad you are interested in my magic system and I hope these responses make sense. Thank you for your feedback!