Every car in LFS is divided into car type classes, which also have their limitations and specifications. These include weight, power, turbo power, torque and idle rpm. In limitations there are ones like minimum and maximum amount of gears the car type class can have, maximum engine size and the amount of cylinders.
With the use of a right tweaker you can alter these limitations to overcome them and have a 12 litre V12 engine in an XFG.
Air resistance is basically what slows the car down at higher speeds, when you remove it the game thinks your car has a giant top speed regardless of the power. I have no idea how the power values work, but I've noticed that smaller values sometimes increase the overall power. If you can't figure it out, it's best to just get power with the use of a lag-less turbine and tweak it's pressure for wanted power.