Colors would if you make separate PNG files for each material. Though the handle area should have less vertices than 32. Go for about 8 if it is for blockland.
I think I gave it 16 or 20, but I how can I lower it without making new objects and deleting the old ones? And could you please explain that color process a little more in-depth? I want to try and get this in-game (I already know how to add mountpoints, etc so color is the main problem right now).
Edit:
So I just replaced the objects, since it's a simple model anyway.

Better?I forgot about the pommel, hold on :p
Edit:
Is there anyway to unjoin two joined objects? The gold hilt and the gold part of the pommel are joined.
Also:

Modeling, contrary to my very first few attempts at it a few months ago, is pretty fun.