Is there a way to edit textures in unturned? I plan on using this to make people stick out like a sore thumb. If this is possible will it also be blocked by VAC?
No. I got a hack which is just simply full bright (made it by manipulating some files...no coding made) and no water, you can ride cars underwater(on other people's screens) (but you can drown tho). So yea, I bet you wont get banned by doing such stuff.