You should have plenty of cash after a while - each time you enter the battleground the merchants restock their cash and revise their inventories so you can sell all you have even if they don't have enough money to buy it - just return a few times. The fire arrows alone that the monsters in the first BG drop are worth a fair amount and if you clear out the first dungeon (clicking on all barrels, bookcases, chests, etc that have anything in them) you should have a lot you can sell.
The shortsword is nice to have for a low strength character since no strength is needed to use it. If you have a warrior that you give good strength to you will want to switch to better weapons later.
NOTE in particular that 1.45 has eliminated the enhancement to sharpen that came in with 1.44. You now need more agility to use sharpened weapons (+9, 13, 17, 21, 25 etc).
This means that you can't use a weapon created with sharpen skill 6 (if created with the patch installed, weapons you already have stay as is) unless you have at least agility of 30. If you put essentially all your points into agility this means level 7 (and with strength of 4 or so you won't be able to use many other weapons).
A level 7 character with agility of 30 and all other skills near the starting values is quite powerful - I ran the hero and the DK well into act 1 with that approach and never once even needed a healing potion - but not many of us like putting all our points into one attribute.
