I'm trying to do the private group play online but, despite being in the same area together, my friend and I aren't actually able to see each other.

Anybody else have this issue?

iirc that isnt supposed to work properly until BETA 2

It works kind of. You just need to log out and back in while in the same region and verify everyone is together then you can play. There are multiple servers so it might take a few tries but we have had luck playing together using this method.