Should you remove the patina? I wouldn't unless it's rusting. The iron in your knife is always going to react as either Fe2O3 (rust) or Fe3O4. What you have is the good stuff that people try to build over time. If you remove the patina and start over, it will be more reactive. On japanese carbon steels I've been getting lots of blues and purples, my forgecraft has only ever gotten black patina. So if you're removing it to try a different looking patina, I wouldn't bother.
For the handle, use a mixture of mineral oil and beeswax. You can buy it or make your own on a double boiler. 5:1 oil wax ratio. Also good for wood spoons, cutting boards, and salad bowls.