The welded upper band is original. Seen hundreds like that. Just churned out cheap by the sub contractors. Yours is a good example of what we call the proof of the pudding. The fact is that while it might look crap, it has actually done the job it was made to do 70 years ago!
You don't need to remove the fore-end of a No4 to replace the butt. The two are not interconnected as on the No1 rifle. A replacement butt will need a degree of hand fitting and MUST be taper tight in the butt socket. But I'm bound to say that from where I'm sitting, your fore-end definately ain't walnut! It LOOKS a pale wood, pretty much a similar colour to the butt. Might be DIFFERENT wood but similar colour and that's all that mattered in our Army. If the rifle is pretty well original, then if it ain't broke, don't fix it!
Re what Cinders says about preventing the top handguard sliding forwards and creating havoc with the accuracy. Not sure I'd insert wood into the recess of the metal handguard cap but if you just ding a small flat across the corresponding edge of the upper band, that won't look unsightly as a centre punch mark would but would catch the front and backedge of the upper handguard cap. Problem solved!
Just my 2c's worth on the Q's asked!