Does torque increase with increase in backpressure

Check out this torque site.

https://www.doityourself.com/forum/outdoor-gasoline-electric-powered-equipment-small-engines/457808-ok-increase-rpms-briggs-stratton-mower.html

if you have it in neutral then the car will not accelerate
just the engine will increase in rpms
if it is a manual and in gear and you increase engine rpm but the car is not moving, it is more that likely a clutch master cylinder or cable problem
if automatic , run the fault codes and check for a problem torque converter clutch servo/solenoid problem

It is common for rpm's to increase, as the acceleration increases... That is when the transmission comes into effect, when the RPMs increase, the next gear is then shifted into.
if the RPMs continue to increase, then the transmission is not shifting. It's possible that you have a transmission or torque converter problem.

There is a spring by the air filter box on the front of the engine (spark plug side of engine). It is a little behind the air filter box. Using your index finger you will be able to pull it towards you. I would not move it very much. This will increase the rpms. To lower the rpms push it back a little. You may have to do this a couple of times to get the rpms just right. Hope this helps.

Some say that "an engine needs backpressure to work correctly." Is this true?
No. It would be more correct to say, "a perfectly stock engine that cannot adjust its fuel delivery needs backpressure to work correctly." This idea is a myth. As with all myths, however, there is a hint of fact with this one. Particularly, some people equate backpressure with torque, and others fear that too little backpressure will lead to valve burning.
The first reason why people say "backpressure is good" is because they believe that increased backpressure by itself will increase torque, particularly with a stock exhaust manifold. Granted, some stock manifolds act somewhat like performance headers at low RPM, but these manifolds will exhibit poor performance at higher RPM. This, however does not automatically lead to the conclusion that backpressure produces more torque. The increase in torque is not due to backpressure, but to the effects of changes in fuel/air mixture, which will be described in more detail below.
The other reason why people say "backpressure is good" is because they hear that cars (or motorcycles) that have had performance exhaust work done to them would then go on to burn exhaust valves. Now, it is true that such valve burning has occurred as a result of the exhaust mods, but it isn't due merely to a lack of backpressure.
The internal combustion engine is a complex, dynamic collection of different systems working together to convert the stored power in gasoline into mechanical energy to push a car down the road. Anytime one of these systems are modified, that mod will also indirectly affect the other systems, as well.
Now, valve burning occurs as a result of a very lean-burning engine. In order to achieve a theoretical optimal combustion, an engine needs 14.7 parts of oxygen by mass to 1 part of gasoline (again, by mass). This is referred to as a stochiometric (chemically correct) mixture, and is commonly referred to as a 14.7:1 mix. If an engine burns with less oxygen present (13:1, 12:1, etc...), it is said to run rich. Conversely, if the engine runs with more oxygen present (16:1, 17:1, etc...), it is said to run lean. Today's engines are designed to run at 14.7:1 for normally cruising, with rich mixtures on acceleration or warm-up, and lean mixtures while decelerating.
Getting back to the discussion, the reason that exhaust valves burn is because the engine is burning lean. Normal engines will tolerate lean burning for a little bit, but not for sustained periods of time. The reason why the engine is burning lean to begin with is that the reduction in backpressure is causing more air to be drawn into the combustion chamber than before. Earlier cars (and motorcycles) with carburetion often could not adjust because of the way that backpressure caused air to flow backwards through the carburetor after the air already got loaded down with fuel, and caused the air to receive a second load of fuel. While a bad design, it was nonetheless used in a lot of vehicles. Once these vehicles received performance mods that reduced backpressure, they no longer had that double-loading effect, and then tended to burn valves because of the resulting over-lean condition. This, incidentally, also provides a basis for the "torque increase" seen if backpressure is maintained. As the fuel/air mixture becomes leaner, the resultant combustion will produce progressively less and less of the force needed to produce torque.

Unfortunately yes, the torque converter has gone bad, and it is slipping. Increased rpm is due to the lack of friction in the turbine / torque converter, the equivalent of a burned out clutch in a manual transmission. Burnt smell is due to overworked, overheated transmission fluid. Turning off the engine, and letting the fluid cool down, will improve the situation for a few miles, until temp goes up again.

yes. That baffle was there for just that reason.

P0400 = EGR Flow
P0325 = knock sensor (Do not ever change a knock sensor, they don't affect anything and cost $600 to replace for absolutely no gain)
P1200 = I can't find this one. I think it's injector flow
report back on what you find.
Egr flow may be plugged egr passages or a bad solenoid.
--------------
1996 PCED OBDII-Villager SECTION 1B: Description and Operation
Exhaust Gas Recirculation System
Exhaust Gas Recirculation (EGR) System Operation The exhaust gas recirculation (EGR) system (Figure 1 below) recirculates a portion of the exhaust gases into the intake manifold under average vehicle driving conditions to reduce combustion temperatures and exhaust gas NOx content. The amount of exhaust gas recirculated varies according to operating conditions and will be cut completely under:

• Engine starting condition
• Low engine coolant temperature condition
• Excessively high engine coolant temperature condition
• Engine idling condition
• High engine speed condition
• Mass air flow sensor failure

The exhaust gas recirculation (EGR) system on the Villager uses the exhaust gas recirculation/evaporative emission (EGR/EVAP) control solenoid valve to provide vacuum to both the EGR valve and the EVAP canister when commanded by the PCM. If the exhaust backpressure is sufficient to close the EGR backpressure transducer valve, vacuum is sent to the EGR valve and allows EGR gas to flow into the intake manifold. If the exhaust backpressure is not sufficient, the EGR backpressure transducer will remain open and allow vacuum from the EGR/EVAP control solenoid to vent to the atmosphere.
The EGR system monitor, for OBD II regulations, uses an EGR temperature sensor to monitor the EGR system. The EGR temperature sensor is a thermister located in the EGR passageway. When hot exhaust gas is recirculated into the engine, the temperature at the EGR passageway increases. This increase is sensed by the EGR temperature sensor and a signal is sent to the PCM to indicate EGR flow. If the EGR temperature sensor does not detect EGR flow when commanded by the PCM after two consecutive drive cycles, the malfunction indicator lamp (MIL) will be illuminated and a diagnostic trouble code (DTC) will be stored. The MIL will be turned off after three consecutive drive cycles are completed with no malfunctions detected. The DTC will remain stored in the PCM memory until 80 drive cycles have been completed without the same malfunction detected in the system.
Figure 1: Exhaust Gas Recirculation (EGR) System Diagram Item Number Description 1 — EGR/EVAP Control Solenoid 2 — Air Cleaner Housing 3 — Throttle Valve 4 — EGR Temperature Sensor 5 — EGR Valve 6 — EGR Backpressure Transducer 7 — EVAP Canister
Exhaust Gas Recirculation (EGR) Backpressure Transducer Valve The exhaust gas recirculation (EGR) backpressure transducer valve is used to control EGR. The EGR valve is operated by ported vacuum, but the ported vacuum will normally be vented off at the EGR backpressure transducer valve. As rpm increases, exhaust pressure increases and pushes on the diaphragm in the EGR backpressure transducer valve and closes the vacuum vent.
Figure 2: EGR Backpressure Transducer Value
Item Number Description 1 — Throttle Valve 2 — Vacuum Port 3 9D475 EGR Valve 4 9F452 EGR Backpressure Transducer Valve 5 — EVAP Canister 6 — EGR/EVAP Control Solenoid 7 — Vent
EGR/EVAP Control Solenoid The exhaust gas recirculation/evaporative emission (EGR/EVAP) control solenoid (Figure 3) is controlled by the powertrain control module (PCM). The EGR/EVAP control solenoid controls vacuum to both the exhaust gas recirculation (EGR) valve and to the evaporative (EVAP) emission canister. When the EGR/EVAP control solenoid is off (12 V signal from the PCM) vacuum is supplied to both the EGR valve and to the EVAP canister. When the EGR/EVAP control solenoid is on (ground supplied by PCM) vacuum is vented to the atmosphere keeping the EGR valve closed and no vacuum to the EVAP canister. The PCM will command the EGR/EVAP control solenoid on at:

• Engine starting condition
• Low engine coolant temperature condition
• Excessively high engine coolant temperature condition
• Engine idling condition
• High engine speed condition
• Mass air flow sensor failure

Figure 3: Exhaust Gas Recirculation/Evaporative Emission (EGR/EVAP) Control Solenoid
Exhaust Gas Recirculation (EGR) Temperature Sensor
The exhaust gas recirculation (EGR) temperature sensor (Figure 4) is a thermister type sensor that monitors the temperature of the exhaust in the EGR passageway. As the EGR flow increases, the temperature increases. This process creates a change in the resistance of the sensor, which decreases as the temperature increases. The signal is sent to the powertrain control module (PCM) to indicate that the EGR system is working properly. If the EGR temperature sensor does not change resistance as the PCM expects on two consecutive drives, the malfunction indicator lamp (MIL) will be illuminated and a diagnostic trouble code (DTC) will be stored.
Figure 4: EGR Temperature Sensor Exhaust Gas Recirculation (EGR) Valve
The exhaust gas recirculation (EGR) valve (Figure 5) recirculates portions of the exhaust gas back into the intake manifold to reduce the amount of the NOx released during combustion and to reduce combustion temperature. The amount of exhaust gases that are released into the engine is proportional to the load on the engine.
Figure 5: EGR Valve

Idle Air Control (IAC) motor is sticking.You can try taking it off and cleaning it but most likely will have to replace it.

If it's a fuel injected motor u coukd add better software
Can also flow and port the head
Will get at least 10% overall increase