The good news is that you have accurately summed up the situation, including the pros and cons.
The short answer is that melee is very difficult for low Strength characters, and for the purposes of this discussion Strength 4 is low. The slightly longer answer is that melee characters often need dedicated builds to make them work well.
The best way around this for an adept is Nerve Strike, but that's from Street Grimoire and isn't available to someone only using the core rulebook. (As an aside, using only the core book I can make a street samurai that I'm 90% happy with, but trying to make an adept without Street Grimoire drives me crazy.)
First thing to ask yourself is why you want melee at all. Is it to never be defenseless? Then take Unarmed. Is it to murderize people without a gun? Then take Blades or Clubs and get a weapon focus. Is it to be stealthy and/or knock people out? Then take Unarmed and get a shock glove. Do you just want kick spirits in the nuts because no one else on your team can? Then a weapon focus will do better damage than Killing Hands. (To answer your question, yes, Killing Hands essentially turns your hands into a weapon focus in the sense that they can injure spirits (physical or astral) and bypass Immunity to Normal Weapons.)
If you're trying to cover Pistols, Sneaking, Locksmith, Tracking, Perception, and Assensing then your skill points are going to be in high demand. If I were you, I'd probably put 1 point into Unarmed (probably purchased with 2 karma), get a shock glove, and then rely on your presumably-high Agility to be okay. The shock glove provides more damage than other options at Strength 4, has better AP, and can also be used non-lethally. It also has the advantage of discharging on a tie (see Grazing Hits on p. 173) and getting a +2 to attack since you only need a touch-only attack. That will help add some dice to what might be a modest dice pool.
Good luck, and let us know what option you go with.