Miraak5

Sorry but HERO is the only way

You don't need to have both .tga and .dds in your game

the game usually only use .dds files (even if it's saying .tga in stuff like mappedimages)

if you have trouble with photoshop dds plugin for alpha channels or quality you can use paint.net it has native support for dds

when you want to add new models or textures to the game, they need to be referenced inside the asset.dat, you can look online for some asset.dat guides

it's kinda hard to detail everything in a post

You made a pretty basic error xd

look at your CommandButton SpecialPower = "SuperweaponSpawnOathbreakers" it should be "SuperpowerAdditionalEagles"

Actually i have an easy fix that always worked for me
It's actually a skeleton issue, just importing and re exporting the skeleton will fix it
Once you did that, export your model again, your arrow should be the normal size

(note that you don't need to include the "edited" skeleton into your game, you only need it for exporting the model, it will render fine with the original skeleton too)

PS: for your max8 rendering issues, i have an other fix you can try

make a copy of your 3dsmax.exe and rename it to something else (whatever you want) and always run max8 with that new .exe (as admin), what it does is bypassing windows default compatibility shims for max8 that are kinda flaky
On W7 it now runs without breaking aero (and also fixed all issues i had with the right click menu)

i heard it also fixed more issues on W10+, maybe it can fix your rendering issue