The basic structure of this sentence is:
> X ****
> The difference between Japanese swords and other swords **is** (in) X.
The "is" in the translation simply corresponds to the copula at the end of the original sentence. There is no need to change it to something else like "could be".
The "X" part consists of two nested embedded questions:
> **** ****
> how much [blacksmiths] are particular about whether their _hamon_) and iron are beautiful
(I believe is a misspelling and thus "ripple" is a mistranslation. The correct kanji is . That said, this misspelling is understandable because has a wavy appearance.)