combined weight of occupants and cargo should never exceed 1070 lbs
You say "this one confuses me," so let's try to make it a little clearer.
What this means is, the total weight of everyone in your truck, plus anything else you have in the cab or bed, plus the weight of the trailer tongue should not exceed 1070lbs. This includes accessories such as bed toppers, bed mats, running boards, and stuff like tools, roadside emergency equipment, etc..
1070lbs is VERY low for a payload rating. You must have a truck with every option known to man on it.
If you have your wife and three linebacker sons in the truck with you, you could easily eat up that 1070lbs before you even hitch up.
I'm just stating this so you have the information to know how to go "by the book." You can always throw the book out the window if you want. HOWEVER, I really don't think you should shoot for a 10,500lb trailer because you simply won't be happy with the performance.