I definitely think weapons are the way to go rather than Martial Arts for offense. The fact that martial arts have 4 ranks means that martial arts will almost always be much more expensive (if you buy all four ranks) or less damaging (if you only buy 1 or 2 ranks) than a weapon. For 6 development points, you can buy a melee weapon, or 2 ranks in martial arts; the melee weapon will be much more damaging in general.
I think it depends more on whether the OP goes for short or long term. At short term, melee weapon is probably better. At long term, however, martial arts give two martial weapons, in addition to the dagger and the staff, that inflicts as much damage as the weapon used in melee, with an additional martial art critical, bonus in initiative and ability to strike several times in a round, possibly more than one opponent. Since buying all four martial art ranks has an equal cost to buying two weapons (not to mention both weapons have to be of the same type, whereas the two martial weapons do NOT have to), investing in the martial arts is way better.
Combined with adrenal strength, whose cost is pretty low for a Mentalist and that doesn't need to be bought too much (since a roll over 100 is enough, with the +3 per level bonus, at level 10, a Mentalist can have +80 +stat, which should suffice), and leather armor, such a Mentalist may be quite an asset in melee. Of course, not to teh level of a pure fighter, but then, it
is their job!