Wilder, a lot of people seemed to agree with your assumption of the ending. Many agreed with that theory, however, because there is now Advent Children, we can safely assume that it didn't end like that.

As for the gunblades, they do look like they have some sort of bayonette thing at the end of them, but as far as we've seen from trailers'n'such, they don't use them at close range. I think they're just wierd lookin' guns.