How should i go about making foliage for my game, is it better to use a transparent png or should i make a full model in blender. How should i go about animating it (would i meed to set up an armature?) and how would it interact with the player? Thanks for any and all help 
Foliage like grass, bushes, trees actually animate in the material using World Position Offset. It’s just a static mesh. Probably with enough vertices to bend? Quixel has grass assets you can use.
The foliage tool is pretty simple. Make Static Mesh Foliage for the static meshes, drop it in, and paint.
If you want a grass landscape material, there are free ones on the marketplace or I’d follow a tutorial and then one for interaction. They’re both a bit involved.
There should be a simple tutorial for adding wind to the grass material as well.
For some reason I got into assuming you mean grass. Don’t make me rewrite this lol. Because you said transparent png I assumed grass.
Bushes, I forget exactly how I did interaction but if you need that and can’t figure it out I can check. It was an actor overlap event because I wanted multiple things to happen with bushes.
Eventually once i get everything figured out I’ll probably do bushes as well but I’m sure I’ll be to adapt it to fit for bushes. Also i was thinking of using procedural generation for some randomness in the landscape, would it be better to use the landscape tool instead or would it be essentially the same?