to find the second butteflygame you just continue along the same road as the first. it's there. just look for a rainbow coloured butterfly.
as for the rusty sword... remember just before the crusaders and the al bhed tried to fight sin with machina? Seymore let you pass through the gate right after the chocobothing happened. At the end of the road a crusader tells you tha seymore is waiting and tells you to take a left turn. (you get to the road with all the waterdriven elevators that lead to seymore and the battle scene) the crusader blocks the path straight ahead. When you have the airship, go back there and continue down the road you couln't take before. along there is another waterdriven elevator that leads you to a statue. There you place the sword and a glyph shows on the mountain wall. touch the glyph..