In essence, in Blender, yes you do export the file with materials. No, the converter does not read the MTL file.
The material name must match the material in Blender.
Another thing I found is the conversion process can be sensitive to file names. make sure they are short and make sure the starting OBJ file name matches the folder name.
Crashing with no error message may indicate you're trying to display an animated model before it is fully loaded, but what do I know?