Just because you put an IP address on something, doesn't mean it's going to work.
Let's say that you have two devices: 192.168.1.10 and 192.168.1.20.
These two devices expect to be able to send broadcasts that will be seen by the other, and to be able to send ethernet frames directly to and from each other - no router is required for these two devices to talk to each other - only a dumb ethernet switch, or even an ethernet cable directly between them....
Suppose you have two dumb switches sitting on the table, and you plug 192.168.1.10 into switch 1 and 192.168.1.20 into switch 2, but you don't connect the switches together at all. Would you expect this to work? Of course not.
If you connect switch 1 to switch 2, then you've merged them into a single network, and now of course .10 and .20 can see each other. Want Internet connectivity? Plug a router into this switch and now .10 and .20 can get to the Internet through the router.
Suppose the router is in switch 1, and you disconnect the link from switch 1 to switch 2 - .20 will no longer be able to reach .10 or the Internet.....
Move the router's connection onto switch 2, and now .20 can get to the Internet, but not to .10.....
Okay - on the Mikrotik, ether2-5 are the same as one of these switches. Ether1 is special - it is not connected to the "switch" (by default) so anything plugged into ether1 can ONLY talk to the router, and ONLY on whatever IP address is configured there. So if you connected hosts .10 and .20 to ports ether2 and ether3, then they can communicate directly with each other. If you put the IP address 192.168.1.1 on the router, interface ether2, then everything's going to work again - but if you put 192.168.1.1 on the interface ether1, then .10 and .20 can still talk to each other, but not the router anymore because that IP address is no longer in their switch.
I hope this makes sense - I'm trying to explain networking fundamentals, and it's hard to do without having my trusty whiteboard.
Anyway - my initial response was what you can do to make your network nice and simple and functional. If you really want some devices to be on .1.x and others to be on .88.x, then there are ways to do this, but including the ISP router is going to make this a much more complicated configuration for you.