torque

You are both right. The original concern was not having sufficient power to climb a grade at speeds above 40 mph. That scenario requires max hp for the engine. That point occurs at 5600 rpm at wide open throttle, so that's where you want to be. 

When cruising down the freeway at 60 mph, our rigs use only about 45-50 hp. Engines can develop that at an infinite combination of throttle and rpm settings. In reality of course you are limited by gearing to several options. Of those, the one that keeps the rpm the lowest will be the most efficient because that reduces pumping losses.  Since hp= torque x rpm/5252 (in US units) there won't be an issue of undue stress on the engine due to torque requirements because the hp requirement is low. You'd have to be down around 1000 rpm before that became a problem. If you're around 2000 or so your engine should be pretty happy and your fuel economy should be good. 

Sure, it should be fine to run at the higher rpm occasionally, just noisy. If the manufacturer didn't want you to ever run at that rpm they would have set the red line lower. 

Given the choice, I prefer to run at a higher rpm in a lower gear to develop the same hp and speed when climbing grades in hot weather. The cooling system works better at higher rpm. That is less important these days with electric radiator fans but it used to make a huge difference in engine temp with belt driven fans And boy did it make a big difference in old air cooled VW's. It would be the difference between having a burned exhaust valve or not by the time I got to the top of the I5 Grapevine in CA (ask me how I know).