Joint and Stretch at just 1 offensive stat

Not in all cases, no.

Impact, for example, defends against full-body impacts - most slams, things like tackles or bodypresses, and most wrestling-style "down" moves that aren't submissions or punches. It's less of a defense against power moves specifically than against pro-wrestling moves in general. (If this makes it sound way more important than any other defensive parameter, it's because it is.)

Now, a lot of those moves ARE governed by Power, offensively, (at least in part) but not all of them. A lot of Agility-based moves will end up being Impact defense, some suplexes will use it, even some rough attacks will use it - if it's a "wrestling move" there's a good chance it uses it, regardless of what offensive parameter is used.

Lariat, on the other end, solely defends against lariats/clotheslines. Not all arm power moves, just lariats. And a lot of lariats do use Arm Power, but a lot also use Agility, a few might even use Power (with Arm Power second) - doesn't natter what they use offensively, they're all lariats, they use lariat defense.

There's a move data sheet for FPR on gamefaqs that has basically ALL the info you could want on any action you can take in Firepro, including what defensive params are used. It doesn't include the newer moves, but it'll still help you make sense of how everything fits together.

The illegal ones are at least *mostly* sorted into the "Illegal" category in the move list, which helps a bit. There's a few that aren't though, I think?

In an ideal world (for me at least), only Submissions marked with 'S' or 'F' would lead to a tap out unless the edit has a specific style like 'technical' in place or Critical on Submission. 

It does, and it's a crutch for bad logic frankly... but that's probably opening up a can of worms.

The point of late-match submissions is a false-finish. A false-finish isn't a good false-finish if there's no way it can finish a match. 
The only holds that should have a 0% chance of getting a submission victory already don't in the game proper. 

I definitely disagree that the Rest Hold mod is just a crutch for bad logic. Sure, it could be used simply as a safety net if you want edits to do finisher-level submissions all over the place without winning, but that'd be a silly way to use it and most people I know who use the mod do so a bit more thoughtfully than that. The main thing that got me on board were the MMA moves, particularly the knuckle arrows, headbutts, rib punches, side body knees and what not that are all able to end matches. Since I don't make any MMA fighters myself, I love being able to use those in small amounts on my pro wrestlers in the late stages of a match without fear of a bad ending. One particular thing I like to do is give a not-particularly-vicious edit something like the elbow butts or mount punches late in the match, to give the appearance of them "snapping" and beating the piss out of the other guy like Ralphie does to Scott Farkus in A Christmas Story. I suppose the negative impact of using rest holds is that on occasion I'll see an odd ending to a wrestling match from one of my edits in another person's game, like crown knee kicks causing a submission, but I do what I can to minimize those chances, and I consider it a small price to pay to be able to use the MMA moves a lot more liberally in my game. When you watch a real wrestling match, things like pindowns are pretty commonplace so I find it adds a little extra dash of realism being able to bust those out some more while ensuring you'll still have a proper pro-wrestling ending to your match.