Translation:He is interested in making wooden things.
Precisely so. The grammar term is "przydawka dopełniaczowa"(genitive attribute), which is used here to describe the gerund "robienie"(in instrumental).
As the name implies, this kind of attributive is always in genitive(cf. "Jego interesuje robienie drewnianych przedmiotów").
Przydawka dopełniaczowa is always in genitive(that much I remember from język polski in school ;-) ), but there are many other kinds of przydawka. I think(but I'm not sure, to be honest - I don't remember that much from j. polski) your examples are of przydawka rzeczownikowa kind(which is created from noun in any case other than genitive, if my memory serves).
Also, I think "kierowanie ruchem" might be a set phrase, because "Policja przejmuje kierowanie ruchem gdy nie działają światła" but "Rolą przydrożnej reklamy jest kierowanie ruchu na stację paliw".
An excellent question and I'll try to answer it, although I'm not 100% certain if this is accurate.
They both originate from the same Proto-Slavic root *dȇrvo that featured an ablaut alternation which caused a vowel to be reduced in one of the versions of this root (so-called zero-grade).
In Old Polish we hence ended up with two versions. One which contained a (palatalising) vowel that caused the /r/ to soften to /rʲ/ and another one with no such vowel, where the /r/ remained 'hard'.
Then there was a consonant shift, which caused all palatalised (soft) /rʲ/ to become 'rz' (that's why we have this weird spelling instead of just 'ż'). And since the other version contained a hard /r/, it wasn't affected by it.
In Russian, where no such shift took place, there is 'дерево' (tree), which has a palatalised/soft /rʲ/ (because of the vowel 'е') and 'дрова' (firewood) which has a hard /r/ (because the 'о' doesn't soften it).