Well real-world soldiers do carry knives for use in close combat, and I guess the logic would be that in the SW universe soldiers would carry knives as well. The catch is that SW is aimed at kids (of all ages ), so I can't imagine them putting knives in one of their games. The last thing LA wants is some kid play-acting a fight from KOROR using their parents kitchen knives. Replacing knives with swords in the games is, ironically, safer if only because fewer people are likley have have a Katana lying around. Thus the kiddies will either use one of the plastic sabres you can buy, or a cardboard tube, if they get carried away and stage a couple of fights basied on SW.
You're seriously overthinking it. Swords are used because the add an element of diversity, are fantasy staples, and easy to implement. In a game where the player uses a Jedi, swords serve to balance the Jedi > Everyone by giving everyone a near Lightsaber equivalent. However, it's just not Star Wars.
For your example to apply reasonably with swords being a knife substitute, then soldiers would have to specialize in knives and commonly run at their enemies from down a hallway, knife drawn, to slash him. The knife is first and foremost a survival tool with some combat application, not the primary weapon of any soldier. And I certainly don't see anyone with a double knife that is wielded like a mini staff.