A torch deals 1d3 points of fire damage, not physical damage, and so the elemental damage is not modified by your strength modifier. If the torch does physical damage too, like 1d4, then your strength modifier would be applied as normal.
A swarm of creatures is considered to be a single creature, and the creatures in the swarm are packed so closely together that they are effected by physical forces just as a regular creature of the same size would.
You swing a sword? It does damage as normal. Shoot an arrow into the swarm? The same. Either of those happen to be flaming? Bonus damage.