first thing, no you can not use that texture, and second, if you were using ingame textures you could have made the whole sword look like that
third; to change the model's internal name, go to model editor, open the model, go to 'edit' tab, go to 'model properties' and change the first bit, that says 'name' above. then click 'OK' and save the model
third; to change the model's internal name, go to model editor, open the model, go to 'edit' tab, go to 'model properties' and change the first bit, that says 'name' above. then click 'OK' and save the model