"What parts are responsible for producing torque?"

All of 'em.

"Should torque always be pretty close to the hp of the motor?"

Horsepower is a mathmatical function of torque. They are always equal at 5,252 rpm's.

" What would bring the torque up a few notch on a 305?"

Standard hot rod procedures. Getting more mixture through the motor.

"And how do we determine what kind of gears to put at the other end to make it more efficient "

You gear the car for what you want to do. Numerically low gears for good fuel mileage (for instance 2.50:1, 2.80:1, 3.00:1) or numerically higher gears for maximum performance (for instance 3.90:1, 4.10:1, 4.56:1).

With gears, it's the number of power pulses per revolution of the tire. In a 4-stroke V8, there are 4 power pulses per revolution of the crank, so a 4.56 gear will apply 18.24 power pulses per each revolution of the tire, a 2.50 gear will apply 10 power pulses per each revolution of the tire.