Lightweight rotating assemblies don't add power or reduce torque. Put it on an engine dyno and it will still have the same static (RPM constant) horsepower.
Now, DYNAMICALLY, lightweight rotating parts allow the engine to accelerate quicker. More power goes to accelerating the vehicle instead of accelerating the engine itself. This makes the engine feel more powerful because the car will accelerate quicker.
This will occur at ALL RPM.
The "torque loss" sensation is a similar phenomenon, except it's mainly a problem with driving habits. The same lower inertia which allos it to accelerate faster, means that the engine will decelerate faster as well. This means that when pulling from a stop, you can't rely on large amounts of rotational intertia to start the car moving, you have to use more throttle. The engine doesn't have "less torque", it just has less inertia so you have to feed it more throttle when you're slipping the clutch to get moving. Likewise, when going up a hill and the car starts slowing down, the engine has less rotational inertia to help keep it going the same speed.
Again, both of these "problems" are driving habit problems. When pulling away fro ma stop, you should use the throttle and not rotational inertia to get you moving. When going uphill, if the engine starts slowing down (running out of power) then you're in too high of a gear anyway. Heavy flywheels and rotors simply mask poor driving habits.
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