If the blade is tight in the handle (tsuka), the standard practice to get it out without cutting yourself to ribbons is to hold the sword in your hand, blade up, and make a fist with the other hand and beat on your fist that holds the sword. That will usually move it.
Sometimes you have to lever it out by inserting a steel pin into one of the peg (mekugi) holes and using a little leverage.
If your story is truthful there's no reason to suspect this blade is a Chinese copy.
It's in pretty good shape but could of course use a polish.
Not much else can be determined until the nakago (tang) is visible.
Rule refresher: Never clean the tang. Especially never attempt to remove any rust from it. Only very loose stuff that would come off anyway should be removed. If you can't get it off with your toothbrush (nylon bristles) then leave it be.
Same goes for the blade. Eliminate any thought of wire brushes, files, sandpaper, sharpening stones, etc. from your mind. Leave it alone. Leave it for the professionals to address the rust issues.
Put some oil on a cloth and oil that blade. You probably don't have any clove oil but for purely preservative purposes motor oil is better than nothing.
Now make a decision: Either you are willing to invest some time and effort in maintaining the sword (a matter of half an hour every three months is fine if it's stored in an air conditioned environment) or you are not willing to make that maintenance investment, in which case you should sell it to someone who will.
If you want to keep it and preserve it to its best possible state, you'll want to get the blade professionally polished. David Hohfine (www.swordpolish.com) is one of the best US based polishers and does fine work.
I'm not going to attempt to pass any judgement on the blade itself. There's just not enough information to go on yet.
It could be anything from a cheap gunto that's not worth much to a valuable ancestral blade mounted in military mounts.
The menuki appears to be standard pattern shingunto menuki.
Playing the odds, you have a gunto which is a mass produced sword that's not worth a lot but even they are getting a little bit more valuable as the rate of sword (re) discoveries has slowed down over recent years. With a smaller supply, the rule of supply and demand means ANY Japanese sword, even a gunto, is becoming a bit more valuable.
A few years ago a nice gunto was a 300 dollar sword. Today, a good example might bring 1000.
it MIGHT be a better blade than that. But no guarantee. Let's see the tang. Both sides, clear pictures, take the time to make sure they're well focused.
While you're at it, make good photos of all parts of the sword including the menuki. Well focused photos are the only ones that are useful.