Torque is a twisting force. The torque is not changed by servo arm length. The force applied to the linkage and the distance traveled by the linkage will change.

Torque is basically distance multiplied by force. Draw a line through the axis of the output gear on the servo. Go out one inch and apply a force 90 degrees to that line. In your case the force is 160 ounces.

160 oz-in = 160 ounces X 1 inch
Torque = Force X Distance

If the servo arm was 1/2 inches the force doubles.

160 oz-in = 320 ounces X 1/2 inch

So the force with a 1 inch arm is 160 ounces. The force out 1/2 inches is 320 ounces.

Output force = Torque / Distance

So a 2 inch servo arm.....

80 ounces = 160 oz-in / 2 in

.....will have 80 ounces of force at the link. The servo will have a harder time holding and moving the control surface with a longer servo arm due to the decrease in force applied to the linkage. Sometimes a longer servo arm is needed or more throw is needed, then a torquier servo is required.