i am a cautious type so naturally my speciality is bows and high range attacks, but can also improve other weapons damage attack by raising the stats point ?
currently am lvl 19 and i see people in lvl 25, 24 dealing 1000+ damage with their skills....is it possible for me to deal that kind of damage with sword and axe ?

You can deal that kind of damage at level 20 with any weapon.

The character type affects how your stats scale with level, so yes, they do affect your total damage.