How do you know the Service Area is only 1 mile from your facilities? Is it exactly 1 mile, or just approximately. Might be helpful for you to post a screenshot.
Since you said you left most of the network dataset settings as default, I'm guessing there's a problem with the way your Length attribute is configured. You should open up the Evaluators dialog for that attribute and make sure it's configured in a sensible way. See Types of evaluators used by a network—Help | ArcGIS Desktop to understand more about what evaluators are and how they should be configured depending on your desired outcome.
The other possibility is that your network's connectivity isn't set up appropriately for your data. You might need to switch your connectivity policy from End Point to Any Vertex. See Understanding connectivity—Help | ArcGIS Desktop
Here is a screenshot of one of my service area that I measured to be only one mile.
I went back to create a New Network Dataset and modified the connectivity policy from end point to any vertex.
Lastly, I did modify the Units from Meters to Miles.
Should the Data Type be Double?