So basically I need clarification on how to make a model file, the material, and animations. Thanks!

When you say 'make a material', how exactly do you mean it?
The model file format is not natively supported in Blender. The way to import a Grimrock model is with Bitcopy's blender plugin; it does not work in Blender versions above 2.72, so that is the version you must have installed in order to edit them with it. The plugin allows for exporting LoG1 and 2 models, and animations.Also in blender I try to open a model file, but it does not show up
A person could make Shrek 2 in Blender.Is it possible just to make a model in blender, or do I need some other program?