Purpose of side weapons?
Two-year-old question at this point, but still... some quick bits because I was looking up something similar myself.
1) The slots are basically there to carry stuff to the smiths to sell if you're on easier difficulties.
2) As above, early on when your facesmashing power is limited (and your ability to consume cat potions every time you turn a corner is limited because of ingredients/knowledge/toxicityproblems/orens), torches are great against fireweak enemies and for visibility.
3) Tactically, the only thing the slots are good for is a small, one-handed axe with as much "shield dislodge" as you can get. It becomes rather important in chapter III and beyond when every smelly dwarf and his mother is carrying a shield with a 60-70% chance to block your blows. When your attacks get blocked, not only do you not do damage (or it's reduced to nearly nothing) but the recoil interrupts not just your chain but the rest of the attack as well. Repeatedly trying to hit that one thing with a shield and failing 6-7 times while 6-7 other things are beating on the back of your head will get you killed FAST on hard. Lot worse when 4 of the other 6-7 things have shields as well... multiple shields makes group style impossible to use because every swing will get blocked by something, and interrupt you.
Soooo... what? "Dislodge shield" makes the target permanently drop their shield. Whip out your little axe and go lumberjack on some shields, toss an Aard or two in there to keep the group away while you do it. Once enough of them are shield-less, Group Steel Blender to your heart's content, win. That's what short weapons are for, torches early and dislodging shields later. Ignore all the other short/large weapons (unless you get really bored in Chapter III-V and feel like swatting drowners with a twohanded axe for giggles).
Eventually, you can use the Strength tree's Reaper ability (as a really powerful, armor-penetrating shield dislodger with a normal steel sword) which has a 90% dislodge... then they're all pointless and the slots are just for carrying vendor trash.
The reason side weapons exist is like you said, for special effects. The ones I've seen have had effects such as shield disarming (handaxe), fire (torch), and pain (dagger). The only other use I know of is that the torch will provide light if you are unable/unwilling to use a Cat potion, but you have to swap weapons and thus lose the light source if you want to deal any real damage.
For more info, the wiki page is fantastic: Witcher Short Weapons page
The main bit from the wiki page linked above:
These weapons, also known as "light weapons" or "small weapons", are of questionable value to Geralt, but some do have their particular useful applications and they can be picked up and sold for orens, which is particularly useful during the early chapters. Once Geralt obtains Raven's armor, he can carry two, rather than one, of these weapons at any one time. Enemies who have less than 33% of their vitality left may be stunned and/or knocked down by any short weapon attack. Nevertheless, as with heavy weapons, they can not be used in Stun-finishers, meaning that while Geralt performs a finishing move, only increased damage is dealt but the opponent will not die as a result unless the damage exceeds current vitality. All short weapons carry the caveat "this weapon can not be combined with witchers' combat styles".