Step 1: Expressing $x$ in terms of $y$.
From $x^2=16y$, we have
\[
x=4\sqrt{y}
\]
Since the region lies in the first quadrant and is bounded by the $y$-axis, $x$ varies from $0$ to $4\sqrt{y}$.
Step 2: Setting up the integral.
The area is
\[
\int_{y=1}^{4} (4\sqrt{y}-0)\,dy
\]
Step 3: Evaluating the integral.
\[
4\int_{1}^{4} y^{1/2}\,dy
=4\left[\frac{2}{3}y^{3/2}\right]_{1}^{4}
=\frac{8}{3}(8-1)
\]
Step 4: Conclusion.
\[
\text{Area}=\frac{56}{3}\ \text{sq. units}
\]