3 quick questions:

#1 What is the best weapon/focus combo for a R/N toucher? (PvE)
#2 What is the difference between Knight Absorption and Superior Absorption armor mods? (do they stack?)

#3 What is a better PvE mod? (+7 vs armor phy/ele) or (+5 armor)

#1 a high energy staff is your best choice, insightful, +hale and hearty, +10 inherent = +20e.

#2 ones an insignia, the other is a rune, stack they do(im nearly certain)
#3 depends on area. i'd take +5 cause then you dont have to worry about the damage type

1... I just used Kerresh's Staff becuase I had it lying around. You can use any blood staff or a 40/40 blood set.

2... ??

3... neither health +30 .... you can just use dodge/zojun's haste to block some damage

1) It really depends. A caster sword with a +5 energy mod and shield(focus) can be good since you want to be close for the fight at all times and a 2nd weapon high energy weapon set as well.

2) Knight's will do the damage reduction per piece of armor. Each section of the body has a different chance to get hit, and so having a full set of knight's insignia's will give you the damage reduction always. Superior Absorption however only works with 1 of them. Using 2 of them does not stack. So it gives the damage reduction always for any part hit, unlike the knight's insignia that only works for the piece of armor(body) it is applied too.

3) Really depends on the situation. Class as well. On a warrior, I would say either a +30 HP mod or a +7 vs elemental. On a ranger, I would go with the +7 armor vs physical since they already have a pretty decent armor bonus vs elemental with some sets.

Why on earth are you running a toucher in PvE? Probably a staff with an inherent +10e, a +5e staff head, a +5e^50 inscriptions, and ether +5AL or +30hp wrapping. But I must repeat, toucher is a bad idea in PvE. Aside from a couple of green solo farms, it is a worthless build.

The absorption rune affects your entire body, and does not stack with other absorption runes.
The Knights insignia affects only the piece of armor it was placed in, and (obviously) does not stack with other Knights insignias.
The rune and insignia stack with each other.
They also both stack with damage reduction shield mods.

+5AL is better. It's also better than +30hp for most PvE purposes too.