Is there a special term to describe the mental translation of a word? E.g. when one sees a recently learned term, they may think of the L1 meaning rather than directly think of the concept.
I think your term is fine. It's used in existing research, for example Richard G. Kern's 1994 paper The Role of Mental Translation in Second Language Reading. This is helpfully discussed in chapter six of Andrew Cohen's book, Strategies in Learning and Using a Second Language.
I think the term you re looking for is Code Switching. Though this term focuses on the change of language among speakers of more than one language, perhaps a deep analysis of this "linguistic" code switch would reveal that it goes in parallel with a cognitive "code switch". I mean code switching occurs at two levels: cognitive and linguistic. As far as i know, there is no term describing this phenomenon.