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Soft cloth works well. You'll have to wait on a more experienced member about the tight scales. I don't know of a way to fix that, although it may be you just need to add some lubricant.

TwistedOak has a good suggestion, keep to the tang, or the gold wash will most likely be removed. My suggestion about the Dremel is because they can be useful, but can be dangerous to both you and...

Hold off on the dremel for now. Some polish such as Maas or Mother's to start would be good, just careful with the gold wash. It will come off easily.