You don't have to have it equipped, just having in your inventory gives you some light source. If a location takes place around night time, carry a flashlight on the character you're controlling.Some game modes will even only draw from this pool.
Create a lot of custom characters with your own choice of traits and perks as they will go on to populate the recruit pool.Otherwise they'll only attack if a zombie happens to wander into their path. Set your team's AI to "Fightin'" mode so they actually contribute in a fight.