It is possible for the exhaust to work so well as to pull unburned mixture out of the cylinder due to camshaft overlap.

(this is extremly over simplified and only one of the many answers to the question.)

I'd be interested in knowing the reason why torque's lost with using straight pipe.

2nd question ...what purpose does the resonator serve in terms of increasing hp & torque(if any)?
[[ My (limited) understanding of resonator is that it reduces the pulsating pressures ( inherent from the opening & closing of the exhaust valves) and equalizes exhaust pressure in order to create a smoother & quieter exhaust note. Is this incorrect ?

Glass pack or early 320i(non-catalyst) style resonator is a good idea. Don't straight pipe on a relatively stock engine. You will lose torque and won't benefit from much more power on top without mods.

There is not a short answer. As far as back pressure is concerned, do some research on volumetric efficiency. Similarly, your answer for resonators would best be explained by researching the theory of exhaust systems. This is the stuff for thesis programs and/or dyno-geeks, but trust me, you want some back pressure even on road race engines.

BTW, one of the best glass packs is the SuperTrapp because you can tune your back pressure.