The torches are really just goody bags for loot drops, the light doesn't do anything. You can shoot them to destroy them for the loot, if that wasn't immediately obvious? I couldn't think of a better sprite to use for these, except maybe a destructible barrel. The fact that they're light makes them easier to spot though. They spawn periodically just off-screen, same as the enemies.
I'll check out the enemies still spawning outside, I probably need to reduce the boundary a little, as if they spawn exactly on the fencing stones the physics engine may push them outside.
Great ideas about the charging abilities and indications, and thanks for the bug report!