1. If a pet can already dual wield, is there a benefit to using a torch and a weapon over 2x 1h weapons?
Convenience, mostly. Torches are everywhere, and cheap, and light weight. Shields, Lanterns, Lutes, Secondary only weapons also force this effect. JUST the torch forces dual wield, so only 1 inventory slot taken up.
2. Is it ideal to use on both charmed pets AND summoned pets, or is it mostly a function of enabling dual wield on a charmed mob type that doesn't naturally dual wield?
It will force charmed pets to dual wield (if they can). Summoned pets have a very specific range where they can dual wield but don't do so innately (Somewhere in this link is a more specific answer. )
3. 2h + torch allows what? dual wielding with harder hits?
Mostly this is to allow the pet to proc specific 2 handed weapons, while also dual-wielding. Runed Blade, for example, can let the pet Rune itself. This plus a torch lets pet Rune and Quad.
Pet hits are determined by weapon damage x 2 + 1. So the Runed Blade having a base damage of 26 x 2 + 1 = 53. So pets that hit below 53 innately will now hit for 53.
4. Does giving weapons/torches have any effect on charmed pets that can't visibly display equipped weapons? (druids charming animal pets for example)
Animals can't dual wield (Shaman pets, charmed rats, gorillas etc.). They can't equip weapons at all, to my knowledge. So "display" I don't think is the correct term. Kobolds and Goos, for example, quad, without having a graphic change. It's a model/creature type specific event.
5. Is there any other important aspect im overlooking in my questions?
Procs. It's almost always about the procs.
To wrap up, what are the general best practices regarding weapon/torch equip mechanics? Always use X, or use X until a certain level, depending on pet type do X, etc?
IF charming AND you want it to quad THEN add torch.
IF charming AND you want special procs THEN possibly something besides/in tandem with torch.