It’s funny I should get this question - before I became a Christian I used to practice witchcraft. I am going to answer your question in a few parts:
1. I am not sure where you are thinking of Jesus saying that witches are real - I am not denying that people do practice witchcraft, or that the Bible makes mention of it - but Jesus doesn’t speak about it explicitly to my knowledge. (In a few places in the Old Testament - which is the part of the Bible that was written before Jesus came - witchcraft is spoken of, and we are told that it is wrong.)
2. No, I don’t think witches can do what Jesus could. Jesus performed miracles like healing blindness, making paralysed people walk, and raising someone from the dead. This is far beyond the scope of any sort of witchcraft. But Jesus performing those miracles was actually pretty small compared to what he also claimed to do - Jesus said that he could forgive sin, that is, he could forgive people for their wrongdoing and rebellion against God. That is WAY bigger than anything a witch could do. You can find an account of one of these healings in the book of Mark in the Bible, in Chapter 2. Jesus forgives a paralysed man’s sins, but the people don’t believe that he has the authority to do that, so to prove his authority, Jesus heals the man’s paralysis, and he walks again. You can find the chapter here:
3. How do we know Jesus wasn’t just mentally unstable? Well, I think the miracles speak for themselves. Jesus made big claims - he claimed to be the Son of God. He claimed to be the only way to God. He claimed to be able to forgive people for rebelling against God. Jesus performed miracles so that people could see that he had power and authority and that he was who he claimed he was. But I think the biggest reason to believe Jesus is who he said he was is that he died and was raised again. Jesus was executed by Roman soldiers, who were not only professional, but cruel. His death and burial were witnessed. But then he rose from the dead and hundreds saw him. He predicted this and it came to pass and is recorded for us in the bible by those who saw it (Matthew 16:21). This shows that Jesus was who he said he was - the son of God - because God raised him from the dead! (Acts 2:36)
If you read one of the accounts of Jesus’ life (like the books of Mark or Matthew in the Bible), you will see that he was a pretty impressive guy. He taught in the synagogues (where the Jews met to discuss God’s word), and the rabbis there were impressed with him. Thousands of people gathered to hear him teach and to see his miracles. Some people did think he was mad, but many more believed, and I think the evidence is a good foundation for believing that Jesus is the son of God.
4. I want to tell you, that from my own experience, witchcraft is a lie. It feels powerful, and there is some power in it, but it is deceptive. When I realised that I was living in rebellion against God, and that I couldn’t make things right with him, but that Jesus died to put me right with God - well, I knew it was the truest thing I had ever heard. 9 years ago I gave up witchcraft and became a Christian and I have never looked back. It is really worth reading about Jesus’ life and considering his claims for yourself.
I hope this is helpful to you, and I encourage you to take a look at Jesus’ claims in the Bible.