Mystery simply because she brings very small benefits short of Piety farming, even for Wizards or other spellcasters (which is saying a lot)
Have you tried Refreshment? It's her saving grace, and is especially good for Goblins, Gnomes, and (in a pinch) elves.
Flames is practically NEVER a good option
Agreed; I only ever use it for Assassins. Just like in the alpha, they're the only ones who can actually handle having their attack neutered like that.
It desperately limits your choices, to the point where you often find yourself off much worse with than without him (Taurog).
Yes, you need to be planning carefully when playing with Taurog. Compression seals are a big help. You can also resist-stack with his items, taking only the resistance-boosting item that corresponds to the boss you want to fight by attrition.
While I'm totally with you on what Taurog needs, Minaro, the devs disagree. I've been talking about Taurog's problems for well over a year now, and if the developers were inclined to make a sweeping change they would have done so long ago. At this point, only minor tweaks will be happening.