Exit out of that room (note: the engine room is right below). And get on the elevator door beside the other guy. Get off the elevator and go inside the only door on that level. There's a Memory Cube where you can save. Talk to Sigurd to continue with the game.
There will be some scenes after the Yggdrasil lands in its base. Follow Maison and Citan to the Dining area. After the dialog, head to the electronic room. Note: Do not go inside Bart's room yet. Not until you see kids saying they'll help fix the Gears.
There will be a long dialog between, Bart, Citan and Fei. After Fei leaves the room, head to Bart's room and pick up the Iron Whip. When you go out, there is going to be a scene. After the scene, take the elevator down and try to get inside Yggdrasil. It's another long dialog with Bart.
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Don't go inside the Yggdrasil. Instead, cross the elevator and head left. There will be several scenes after. Go to the residential area. This is the room in front of the elevator. Agree if everything is in order, meaning you've upgraded, etc. And you'll go to sleep.
There will be several scenes after and you'll be fighting some bosses. The last boss, Schapariel, is quite tough. I kept on having Bart cast Wild Smile so all of my attacks landed and all of his attacks are delayed.
After the battles, there will be a dialog between almost all characters. Once you are ready to go, head to the deck and talk to Sigurd. You will be piloting the Yggdrasil. Head to Bledavik, get off the Yggdrasil (X) and get off your Gears. Enter the city.