burn mobs around the player

Under whatever trigger you want it to be (when item in inventory tick, when right clicked with item, ect), you can have it set fire to the closest entity in a radius simply using the "Get nearest entity at X: Y: Z: in square cube with side (4) of type _____".
But I assume you mean all mobs in the radius.

This'll be a little trickier, but one way you could do it is by having it run a command like "effect give @e[distance=0.01..5] mod_id_thing:CustomPotionName", and then have said custom potion do nothing except set entities with the potion effect on fire. By putting a "set entity on fire for ___" in a procedure triggered by the start of the potion being added. It could then be set to be an instant potion, and/or remove itself right after setting an entity on fire by having it run a command of something like "effect clear @e[limit=1] mod_id_thing:CustomPotionName".

Though, This might be more complicated that it has to be.

You will be able to do this in 2020.5 with this feature: https://twitter.com/PyloDEV/status/1310899869645709317

@Klemen where is entity iderator

nvm i found it