What is the difference between Flanking and Pinching? Is it that in Flanking only one unit is attacking an enemy unit on its flank, and Pinching is when a unit is engaged by two units---say one in front and the other from the flank?
Yes flanking is attacking a unit from one of it's sides. Pinching happens when you attack a unit from more than one side. It could be the front and flank. Or both flanks. Etc. A unit only gets the pinching bonus if they are not being pinched themselves, but they still count as pinching the unit for other engaged units.
The combat modifiers for Flanking and Pinching are combined, correct?
Yes, all modifiers are combined. A comon situation is the charge a unit into the flank of a unit who is already engaged. This will get you a (0) +2, +2 bonus. (0) +1, +1 for pinching. (0) +1, 0 for flanking. And (0) 0, +1 for charging.
I don't see any penalties for Bow units engaging in Melee combat. Is that correct? Thanks.
The penalties for engaged bow units are on the archer cards themselves. For example you Dwarven bowmen are (0) -2, -2 while engaged. On the other hand they could get bonuses too like the Dwarven Crossbowmen are (+2) 0, 0 and Defense +1/ 0 while engaged.
Hope this helps. When facing a big nasty unit take advantage of your numbers advantage and try flanking and pinching it. That +2, +2 on the charge should take it down quickly.