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There's both guns and swords available for use as weapons (but guns only if you choose a certain affinity path). The nice thing is that your character changes his/her looks on screen when you switch equipment (weapons, armor, leggings, shields, etc.) and there's a lot of equipment out there to be had.
As for your free-roam question, it is limited in the sense that you can go anywhere you want on your current map to explore, but there is a certain fixed path that unfolds that you have to follow to progress, so not the entire world map is open to you from the start.