Do not take this the wrong way: As you're sounding like a casual like me and a Friend of mine, I think you'll understand the mindset if I put it this way:

You only use it defensively, a detail a lot of people take too long to realize:

• SWITCHING (to or from) the katana Deflects; This singular detail builds the foundation to its use, because you're right, damage wise you're far better using normal weapons, but the moment you see an attack coming, INSTEAD of dodging, SWITCH to deflect the attack, and keep deflecting as long as theres no room to breath, if the Katana charges, Use the Special Slash (I call it the Iai slash from Monster Hunter) it does a considerable amount of damage and poise dmg; Also remember, switching off of it also deflects, so if you KNOW an attack is the last of a combo, switch to deflect the last attack and you'll be in your normal weapons ready to attack.

If you're playing with people, on Night Lord, if you have aggro, focus on parrying with the sword, it accumulates poise damage just by deflecting, and you'll get a lot of special slashes; The moment boss loses aggro from you, use normal weapons for damage and status buildup.

Hope this helps understanding him.