How do Dark Side and Light Side points work with regard to your faction?
You cannot change factions in TOR — what you pick is what you get.
That said, there are small differences depending on whether you are Light Side / Dark Side, such as verbal cosmetic changes in conversation. And your choices may affect companion affection.
Flashpoints are repeatable and have up to +/- 250 points' worth of dark/light decisions among them, and Diplomacy crew missions can yield DSP/LSP as well, so you can always completely reverse your stance (although that could potentially take a /lot/ of work...).