Batch files: How to read a file?

The FOR-LOOP generally works, but there are some issues. The FOR doesn't accept empty lines and lines with more than ~8190 are problematic. The expansion works only reliable, if the delayed expansion is disabled.

Detection of CR/LF versus single LF seems also a little bit complicated.
Also NUL characters are problematic, as a FOR-Loop immediatly cancels the reading.

Direct binary reading seems therefore nearly impossible.

The problem with empty lines can be solved with a trick. Prefix each line with a line number, using the findstr command, and after reading, remove the prefix.

@echo off
SETLOCAL DisableDelayedExpansion
FOR /F "usebackq delims=" %%a in (`"findstr /n ^^ t.txt"`) do (
    set "var=%%a"
    SETLOCAL EnableDelayedExpansion
    set "var=!var:*:=!"
    echo(!var!
    ENDLOCAL
)

Toggling between enable and disabled delayed expansion is neccessary for the safe working with strings, like ! or ^^^xy!z.
That's because the line set "var=%%a" is only safe with DisabledDelayedExpansion, else exclamation marks are removed and the carets are used as (secondary) escape characters and they are removed too.
But using the variable var is only safe with EnabledDelayedExpansion, as even a call %%var%% will fail with content like "&"&.

EDIT: Added set/p variant
There is a second way of reading a file with set /p, the only disadvantages are that it is limited to ~1024 characters per line and it removes control characters at the line end.
But the advantage is, you didn't need the delayed toggling and it's easier to store values in variables

@echo off
setlocal EnableDelayedExpansion
set "file=%~1"

for /f "delims=" %%n in ('find /c /v "" %file%') do set "len=%%n"
set "len=!len:*: =!"

<%file% (
  for /l %%l in (1 1 !len!) do (
    set "line="
    set /p "line="
    echo(!line!
  )
)

For reading it "binary" into a hex-representation
You could look at SO: converting a binary file to HEX representation using batch file

Under NT-style cmd.exe, you can loop through the lines of a text file with

FOR /F %%i IN (file.txt) DO @echo %%i

Type "help for" on the command prompt for more information. (don't know if that works in whatever "DOS" you are using)