Personally, looking at this weapon, I'd say it'd work better (and be more balanced) as a tertiary weapon replacing the Wrench. I'd say stats could resemble the Southern Hospitality, but replacing the Bleed with Afterburn (and dealing Fire damage as well). Perhaps have a build rate along the same speed as the Eureka Effect (what was it, ~16 scrap per sec?) but have each application twice as fast (a lot of little build bonuses compared to larger, drawn out ones).

A blowtorch doesn't have a large range, to begin with. Making it a pistol wouldn't work well, in my opinion. Make it so you can keep it the weapon 'firing' the same way a Flamethrower can be, but reduce the range to Melee. You don't have to worry about the in-between moments while swinging, and can set foes on fire.