I use half worm...or even 1/3 of a worm...hooking them the way I described. If you are fishing smaller segments of worms, use smaller hooks. With 1/3 of a worm, I use #8 hooks. Too small? Ask the 6lb walleye if it was too small.
Yes, you need some kind of movement to get the worm to "twirl". It is simple physics. Water pushes against the worm...if there is a bend, either from the limp line I describe, or the bent hook you're using here...the bend is what causes it to roll. Without any movement (either a worm dropping through the water column which causes water to push against the worm, or if you move it which forces your worm against the water), there is obviously no twirling effect.
As you descibed, if you leave the worm sitting still, then you will only get catfish, but if you start the twitch, then you get bass or pike. Now...is that because of the hook, or is it because the action you just imparted onto your bait to get it to move, thus triggering the bite?
Don't buy into marketing...think about what is really happening...you can impart the same action without buying a special hook.