So I noticed I can only pick up weapons if I replace what I have. Does this change? Is there no way to pick up and sell weapons for gold? When do you get better weapons and how does the crafting worked I heard there was a weapons crafting system
In addition to your two sword slots, you have two additional slots you can use to hold a small weapon (e.g. dagger, small axe) and a large weapon (e.g. another sword, a mace, a two-handed axe). You can sell these weapons, but you can only carry one of each at a time so you won't be able to stockpile a bunch of weapons and sell them.
For crafting, you can use meteorites to craft new steel swords, and runes to craft new silver swords. You must find three such stones to craft a new sword, and the effect vary depending on the meteorites/runes used. In addition to crafting, there are other weapons you will find in the game world through quests, exploration, and merchants which will surpass your original weapons.