The wood could work, as is, with sufficient plant mass to soften the edges. Since you're planning to get new hardscape, you might as well work with what's there for now--or just take it out and concentrate on growing a good stash of plants to rearrange once you do have the hardscape you want.
For the moment, the biggest kindness you can do yourself is to lay down at least another inch of substrate, if not more. Swords, crypts, even stems need at least a couple inches for their root systems. It'll make planting easier and give you enough depth to keep root-tabs from dissolving into the water column right away. Your floating sword isn't too small to plant, you just don't have enough material there to plant it *in*.
Next biggest need is getting a decent light. Two ways of going about that: either buy your light first then fill with plants that work with the light level you've established, or figure out what plants you want to grow and buy the light that supports 'em.
After that-or during--start accumulating more plant mass. Doesn't necessarily have to be the final plants you want, but having a good solid amount of plant mass makes for a healthier tank and gives you something to work with as you start figuring out your personal aesthetics and what works best in your tank. One of the more frustrating--and amusing--aspects of planted tanks is how different plants will look and behave under different conditions. Look for plants with different textures, colors and growth characteristics and buy enough of each type to be able to plant them in groups. As you're selecting plants to buy--or as you trim them once you start getting new growth--think about establishing three levels of plants in the tank--background will be your tallest plants, foreground your shortest and a range of sizes in the midground to blend the transition from back to front.