Hi.
Please set your common-mode voltage near the midsupply (2.5V) to maximize the output swing. Refer to figure 10 to 13 of the AD8421 datasheet for more details on this and also to this video about input common-mode voltage vs. output voltage.
Also, set your input voltage between 2.3V and 3.2V because you're using single supply of 5V.
Regards,
Anna