I usually use the free software paint.net to convert my finished png to the corresponding png.dds file. You mostly need the ALBD flagged files - these bring colour to your plane. If you work on an Asobo aircraft, they use the model itself to bring color, that’s why the LIVERYCOLOR file needs to be a transparent png. If you want some metallic look, there are the COMP files. I haven’t gotten around to playing with the reflectiveness (on my caravan, red and silver/gray should have a metallic-painted look) I shamelessly invite you to have a look at my brown C172 over at flightsim.to, maybe the setup of my files might help you.
Aditionally, I highly recommend using MSFSLayoutGenerator so that you don’t have to write the layout.json yourself.
Also, I just had another reason for using Blender over pure Photoshop. Sometimes, the UV mapping is a bit skewed so that a straight line in Photoshop will be curved and vice versa. The blue/yellow stripes were quite a challenge, as I went for the proven “FSX-compatible” method. I’d do it much more differently nowadays. Maybe I’ll come round to redoing it.