It sounds like you have the correct settings. That aircraft 1000' away at about 1000' AGL should have shown up on the controller since you confirmed it was broadcasting ADS-B via FlightAware.
If you still have the Air 2S, is it showing aircraft...
Understood, but I was also using FlightAware on my phone. I'd visually spot a plane, look it up on FlightAware, look at the Track Log for the plane, and it would be all ADS-B data. I'm just outside of KOAK and these are all airliners headed on up...