I have a question, how do you make a character holding a weapon model then have it be used and make it stay with the character when they run or walk with the animation?
You can attach your weapon entity as a child to one of the character animation bones. Then the weapon follow that bone automatically.
There are plenty of posts in this forum on the subject, here is one:
How do you make a character’s weapon shoot like an arrow or something in that matter?
And How do you make it have impact on another entity?
Check this example on how to apply forces or impulses on rigid bodies:
Rigid bodies are automatically being pushed around when they collide with other rigid bodies. Check the following tutorial on how to listen for collisions with other objects to implement your own gameplay logic: