Lovely tsuba with the playing dog and dragonfly.
Maybe you can gently apply some oil on the tsuba to prevent further rust and accentuate the decoration on the tsuba.
Quite possible that this is a family blade carried out to battle.
Is the leather very dry ?
In order to get leather supple again I have heard that you should do this very easy going . do not apply to much grease, as dry leather will absorb as much as it can and than is more likely to crack.
I can imagine that indentifying the tang is important, but the leather cover is also a significant part of its history.
Nice piece of history all together.