Hi there,
Lines on the screen usually mean a hardware issue rather than software, but you can try out 'Safe Mode' to see if any apps are causing it (booting up in Safe Mode basically disables all 3rd party apps from running at boot unless you manually start them, letting you debug apps without having to uninstall them). However, when you say it's lost the ability to swipe, do you mean at all or just on the keyboard? If it just won't sense touch, then it's looking a lot like hardware failure. If it's just from the keyboard, maybe there's an option that got turned off (or you can try swipe-capable keyboards to test it out, like Swype or SwiftKey).
When you do a factory reset any data that's on the phone will be lost. Only data on SD cards is not formatted. It's like formatting the drive on your PC. All data is erased. Now, that doesn't mean that your data will all be lost. If you set up your account to back up contacts, messages, etc. to a cloud service (like Google), your pictures on a cloud storage (Photos, Dropbox, Skydrive, etc.), then whatever has already been backed up to the cloud will still be there ready to be restored once you get your phone back to working condition. But yes, doing a factory reset will wipe out ALL DATA stored in the phone. It will return the phone to a factory state, just as if you had just gotten it from the store. OS, stock apps, and that's it. That's all that will remain.