What tools to use?

Ah, thank you. Forgot to add the link to encryption tools. Here it is: http://lifehacker.com/five-best-file-encryption-tools-5677725/1685273934

You can chose whichever one you like. The most popular one, VeraCrypt, should work just fine.

Also step 10. I was not aware one can rewrite the mnemonic. I do not have a ledger but is this something specific only to the ledger? Or this can be done in any wallet where there is a mnemonic? Thanks.

You can reset your Ledger, wipe out whatever it stores at the moment and initialize it with another mnemonic to get access to your other wallets. The same should be possible for any wallet that can be initialized with a mnemonic, at least within the confines of the same mnemonic standard.