Out of the box the game doesn't go beyond 640x480.
There is a DLL wrapper that optimizes the graphics somewhat, doesn't really change them (aspect ratio is still 4:3 and same 3D models) but it can force the game to use the same resolution as your desktop while upscaling 2D elements and force Anti Aliasing and Asinotropic filtering, also allows to force the game to use the max LoD on everything.
There is really no way to scale the game to a 16:10 resolution as the 2D assets don't really allow it.
IIRC a version of this wrapper should be already included and you only need to open the CFG file in the game folder, but just in case here's the Githhub link to the latest release (that also works with the windows remakes of the other games and X-wing Alliance):
https://github.com/rdoeffinger/xwa_ddraw_d3d11/releases
Your PC should be fine, the T-16000 should also work, the game doesn't support the twist axis because of a limit of the engine (of the series only X-wing Alliance supports it) but for the rest it should work OK.
Is the t-16000 only the stick or the kit with the TCWS throttle? If the latter you will have to use the Thrustmaster T.A.R.G.E.T. software to be able to use it as the game only supports one peripheral at a time out of the box. Also the game supports only throttle and no rudder because of engine limitations.