It has been very important since the beginning, only its importance gradually increases with each passing unpredictable moment - including the early invasion of the Demon God Sect and their reassembled sect-invasion order.
So? That doesn't mean someone with a kink will for sure have mental illness. Plenty of people with weird kinks that are considered mentally healthy.
Besides, where do you draw the line? Someone sexually obsessed with feet? Hands? Ears? Mouth? Breasts? Butts? Genitalia? Suits? Bunny costumes? etc, etc, etc. Like a especially strong sexual obsession with any of these could be considered a "kink". The line for what you'd even label a "kink" is very blurry, human sexuality manifests in countless ways.
its a spear sect like hakhak said, but as mentioned in this and previous chapter, the people of the chin qiu mountain cultivate their desires, so some of them do infact use swords like shown this chapter.