Troy accepted his death as he knew that Kooluk was losing this fight and wouldn't be able to mount against the power of the Island Nations combined, or at least that's how it seemed, though. He was loyal to Kooluk and refused to accept the power of the True Runes. I think he saw that his time was over and that he didn't stand much of a chance. As the game and information presents him, no there's nothing supernatural about the title, but the way he shows capabilities of fighting on the sea gave him that title; he could fight as if he were actually the child of the sea god.

It's not in the game, but the Noble Hunt and Vanishing Village are indeed related to Cray's son's death. Cray cut off his arm to escape the curse, and the Rune took the child as a host - perhaps punishment for trying to escape the curse? The child used the Rune to burn all the members of the Scarlet Moon Empire who had come on the hunt, and pretty much wiped out the village doing so. Cray is the only known survivor.