I think better not to divide it into words))) Just remember that together "this/that is not so.." - Я пью чай с 3 ложками сахара. (I put 3 teaspoons of sugar in my tea) - Это не так уж плохо, мой дядя кладёт 5! (That's not so bad, my uncle adds 5!) - Я купил эту шапку за 50 долларов. Не так уж и дорого. (I bought this hat for 50 dollars. That's no so expensive) - Я наконец-то сходил к дантисту. Было не так уж и страшно, как я себе представлял! (Finally I visited a dentist. It was not so fearfully as I expected)

"не так уж и" is a set phrase that means "not that ..." followed by adjective or adverb, so your answer was spot on! Let's break it down: - не is a negating particle, - так is an adverb that means "so", - уж is really tricky to translate, so I won't even try, - I would call и a "drama particle", since it kinda adds stress to whatever you say and makes it sound somewhat rhetorical. I found this info and more examples here: http://russian.morpheem.com/phrase/%D1%83%D0%B6-%D0%B8. UPD: Wikipedia writes that уж is a particle that denotes "усиление эмоции" - "strengthening of emotions".