Hey OccultOnion,
- When you select an item in your equipment screen, you should see icons with available actions to the right. To light up an equipped torch, you can press `g` I believe. As for the burning and overall destruction, that's currently unavailable and is planned for next major v0.3 version release.
- There were no plans for conversations so far, that's one of the big things I decided to cut off early to reduce the scope of the game before it would be playable. There seem to be quite many people that would like to see this kind of interaction, so if there will be some meaningful ideas that will enhance the gameplay, it could be added in one of the significant patches later on.
I like the idea of doing more permanent damage, thanks for your suggestion, I'll see if I can fit it to v0.3. You can read more about my plans for the next few major patches in one of the devlogs. :)