This level can only be described as 'fiendish'. This video, on the other hand, can be described by a variety of words, mostly good. Although I do find it slightly annoying how I still have those moments where I want to scream "Switches don't work that way!" But I shouldn't complain too much - the original Marathon trilogy did not make much use of terribly complicated switch puzzles, nor did it make a whole lot of use of switches that could only be toggled from a distance with a weapon, or up close with fists.
About 6 minutes in, you asked about whether shots actually lose damage the further they have to travel. In answer to your question, I have to admit that Marathon's damage calculations are very simplistic. A shot has two types of damage it can deal: base damage, and random damage. Base damage is the amount of damage that the shot will deal no matter what. So, since a rocket has a base damage level of 250, you can expect that no matter what, a rocket will deal 250 damage minimum. Then, random damage is the maximum amount of additional damage that will be added on at random. Since a rocket also has a random damage level of 50, then that means it can deal up to 50 damage in addition to the base damage, meaning a single rocket will deal somewhere between 250 and 300 damage total.
These damage levels do not change based on how far the shot travels. Even more importantly, splash damage is incredibly simple: you're either in the blast radius, or you're not. The same amount of damage is applied both to a direct hit and to everything inside the area of effect - there's no separate damage level for splash damage, and damage does not decrease as you get further away from the blast center.
Anyways, hope that gives you a feel for what your weapons are actually doing when you yank the trigger down and blast a Fighter into next Tuesday. ;)