Hm, not sure about the torches part, I'm sure there would logically be some torches in dungeons where bandits stay. I agree with the rest though, but of course you should still be able to find some rare trinkets and such while exploring dungeons, but of course they should be fewer, and the ones in shops should be comparable or better.
Yeah, that's a true point regarding the torches. Yet I still remember walking into caves in Oblivion that drew solely from generic animal/creature lists, and there would be a crate at the entrance with 2 or 3 torches sitting inside it. Perhaps my thing on torches also stems from my personal idea that the amount of dungeons should be thinned from what they were in Oblivion. Oblivion had 192 dungeons last I counted, not factoring in the 60 Oblivion gates that used the random 7 Oblivion worlds. You leave a dungeon and walk over a hill or two, and lo and behold! There's another dungeon! Reducing dungeons overall will not only allow them to better proliferate depth and unique qualities within dungeons, but it will also cut down on the amount of necessary loot the player can obtain (lockpicks, torches, repair hammers, potions, ingredients, etc, etc). By dropping the overall availability of such things via killing, you set up a scenario where the player will have to consider buying those things from shops instead. I, for one, never had to purchase a lockpick in Oblivion. I never ran out, thanks to the goblins always having them as loot and finding them in loot chests that didn't even make sense (of course, that was aided by the fact that Oblivion's lockpicking was easily overcome by player skill).
And I agree, finding rare things should still be there (though rare things should be hand-placed in my opinion and the usage for leveled lists for rare to semi-rare items should be drastically cut). But that way, the player will, upon finding that rare thing, be immensely pleased and be like "Aw SWEET! I totally just found something awesome and didn't have to cough up a mini-fortune to get it from shops!" As opposed to "Meh, whatever, I'll add it to the ever-growing pile of spammed "rare" things."
You have the option to USE fast travel, or not to use it though. And the leveling of items was a good idea, but it deffinently can be improved upon Leveling/Worth of items.
Not to descend this into a FT debate, but FT is not optional when your alternative is to walk through a world where most quests and events are designed with the premise that the player will use FT. And further, just because a game mechanic is optional doesn't mean it's perfectly OK to add that game mechanic. Should we be given an infinite-use kill-scripted dagger at chargen and be told that it's our option to use it or not?
And besides, if we're looking for a way to give money some more value, limiting fast-travel and adding cost to it is the perfect way to do just that. Convenience oft requires payment, after all. You want to go somewhere quickly? Then cough up some coins. This way, the player has a constant detraction applied to his gold pile, which will further prevent the massive buildup of worthless gold later on in the game.