Of course based on his performances he shouldn't even have been in the provisional squad, but on paper Torres perfectly fits the profile of the ideal striker for VdB's system; on top of that he brings a huge amount of experience, and that's probably what is Vincente's reasoning for taking him (not to mention his veteran loyalty in general). No surprise there at all. Then again, he himself doesn't make much of a difference as the striker question in general is a problem for Spain. They struggle to capitalise on their creativity in midfield regardless of who plays up front, and so far no alternative has really solved the problem. Same applies for Costa now, who doesn't fit the system and on top of that has hardly had any time to gel with the team. So it's not really about Torres per se. Right now, Spain are still probably better off playing with a false than with a real 9. Llorente probably would have been a good choice though and I would have liked to see him over Torres.
As for Xavi, he is likely to retire from international football after the WC. VdB will probably go as well. That's when the transition to Koke/Thiago will take place. Dropping Xavi now and replacing him with either of those 2 (supposing Thiago would be fit) wouldn't make sense as the game still depends on him and neither Thiago nor Koke had enough time to fit into the system. Saying that, had Thiago been fit, he would have been in there over Mata or Cazorla.