Welcome to the boards, Hammerhead! May your sword stay sharp and your staves stay solid.
To add to the responses you've received thus far...
1. Feel free to change to Barbarian when you get a chance. Make sure you've got all the level 7 spells in spirit first, though; otherwise, you won't be able to get them until you're a warlock or zenmaster IIRC.
2. Raising it will do some good, but I believe it's marginal. And I'm sure Radek will correct me [img]smile.gif[/img] What I mean is that at level 7 in the spell school, you can learn level 7 spells. Every spell school level after that has an impact on damage or effectiveness, but you learn no new spells. So after you get to level 7, train in the spell school whenever it's practical, but don't obsess about it.
3. I don't know either, but by the end of the game, few things can hit you for physical damage. So I'd tend to get spells first, and now worry about swords.
4. It makes a nice paperweight, or a good blunt instrument for taking out Sebastio later on
Other than that, no use. Some have thought that it was meant for the Warlock promotion instead of a skeleton's skull.
Do keep us posted on how you're going!