The fantastic wavy pattern you are talking about is called the Hamon, it's a pattern which forms from not only the way the clay is applied but also from the fine grain of the steel.
Three of the most important factors when you wish to see if the sword you wish to purchase is a real ninhonto or not is:
1) The file marks on the tang of the blade (the part which goes into the handle)
2) The hamon line (is it natural heat produced hamon or acid etched)
3) The Yokote (the tip part of the sword, a real japanese sword has a clear line between the tip and the rest of the blade)
Other factors are the worksmanship, a real japanese sword will have high quality craftsmanship in all the materials used. Fake ones will use low quality materials.
If you're interested in learning more about differences between real and fake swords, start with this article:
http://www.nihontokanjipages.com/fak...se_swords.html
Just don't be cheated and don't believe every word of someone trying to sell you a sword, better to be aware of some facts than not know anything at all when you decide to buy one someday. I've known people who thought they hired trusted experts to assist them who in reality was working with the dealers to con off fake stuff. Yes this happens even in Japan.
The different hardness/softness steels are used to control the strength and endurance of the blade. A sword which is too hard or brittle will break/fracture easily on impact and a sword which is too soft will become dull easily. So by using steel of different qualities sandwiched together it produces a balance for a sword with a strong hard lasting edge but flexible enough to endure forceful impacts.