You may be right---I'm no expert here.
W.r.t. the proper use of battle armor, deploying them in open field combat in the presence of competent opposition seems like a waste since battle armor are super vulnerable to AE damage. Given that's not a part of their mission profile, choosing short range weapons for in-facility combat and optimizing for an anti-infantry role seems reasonable, since those are roles that the giant stompy robots can't handle.
I have no idea how to handle hyper golic ammo except that if I was designing it, I would try to seal the hypergolic parts inside a shell. Needlers don't have shells in my understanding, but maybe some soft seal technique exists?
I would suppose so, and it's probably made of handwavium, since the whole concept is dysfunctional as all get-out otherwise. (Your spare ammo is otherwise exposed to the environment and likely to go off in the pouch-would YOU volunteer to carry it into combat?)
point being, whether you're talking tabletop or pragmatically, the Firedrake's not a combat weapon-it's only safe to use when you've already got control of the situation, and 'safe' is only a very, very, very, relative term.
It is, however a very 'dramatic' weapon for showcasing that the government that's buying it is an oppressive, corrupt, insane, and somewhat incompetent evil empire.
ergo, it's a 'villain decay' weapon done to a theme, not something that makes sense either on tabletop, or in anything BUT a dramatic way to showcase how many atrocities your badguy is willing to do to civilians.
On a practical level, the base writeup is a weapon that nobody in their right mind would procure, much less issue,
including evil empires. It's only really matched on that score by the HVAC, since even an HMG has SOME margin of safety to use.
It burns up anything that might be worth capturing, but not as efficiently as a proper flamethrower, and based on the description, those needle fragments will reignite when exposed to air or broken after firing, making occupation of an area where it's been used...problematic for the occupiers, so it's not a good weapon for either offense, or defense, even against infantry (unless you LIKE lugging fire extinguishers around for every man in your formation).
as for your other point, consider this:
Weapons advancements should INCREASE your tactical flexibility. While most suit combat is close urban, there are still situations where you CAN take a longer shot, and should....unless your weapons don't allow you to, because you have to be at tongue-kissing range to fire them.
My infantry don't tend to 'camp' because moving is better than being an easily indexed target. I have driven other players to distraction by not sitting still to be slow-cooked.
This includes how I handle BA. I prioritize movement over armor because most of the time, you can't put enough armor on a suit to be worth it, but you CAN control range and engagement if you have more mobility, and for the Heavies that camp in a building, there's artillery or the other units I'm supporting if I can't make a shot at 3 hexes. (Or infernoes. I love me some infernoes for suits.)
point being that even within the engagement envelope? I'm still able to engage with more fire that HITS using machine gun, or small laser, than with HMG or Firedrakes on the other side, and only hits that hit, do damage unless you're going for AOE, in which case that's what radios and indirect fire, or inferno SRM, or similar systems are for.
oh, and if I REALLY want to light things on fire? a Flamer has 30% more range.