those are alot of questions!
First of all, do you play titan quest with or without the expansion? Because there are some nice features in the expansion you can use really good!
In the expansion it's possible to have extra storage space in the towns, and there is also an echanter which can remove relics and charms from items. In that way you're able to use them again on a different item!
There is a program you can use to change your character, i don't know exactly what it is, but i'm sure someone here can tell you. With this, you should be able to change your mastery.
I understand you would want to keep all the blue items, but many are just not suitable for your character. So you have to make decisions wether or not to keep them. But once again, in the expansion you can store them.
For good sets, you can take a look on this website and decide yourself.
About weapon and armor class, i'm not sure. But in general if you use common sense, you should be able to figure out which kind of item is stronger (iron is stronger then copper) This is more difficult in later difficulties with fictional names....