IWT, when used with Click to Move, will move your toon into close enough range of the mob to perform whatever the right-click action (aka interact) is. So yeah, it will move you into melee range if you let it.
As a very experienced melee multiboxer -- my current "main" team is 5 paladins and the previous one was a paladin + 4 DKs -- I can tell you that IWT isn't even necessary for the majority of 5-man content, but it is very helpful in several PVE encounters and even more so in PVP. If all you need to do is get one of your DPSers close to the mob you're tanking, auto-follow works perfectly well for this. Just move onto the opposite side of the mob from your other guy, and hit auto-follow. If you're not used to using mouselook to turn around quickly (quicker than holding left/right turn on the keyboard), then it's either time to start, or box casters instead
It helps to set your auto-follow hotkey to something easily accessible -- I generally spam it (or IWT) along with my DPS key. It's more important to be able to spam IWT if you use it, than to be able to spam auto-follow, though. This is because with auto-follow they will always come to a certain range of you and stop. With IWT, you can expect them to run off a lot. This is actually a bonus for PVP, because I spam IWT and my ret paladins run circles around whoever they're fighting, making them a more difficult target to melee.
Here's an illustration of how my relevant keys are set up. This is on my G15 keyboard though, which makes it a bit easier to get this sort of configuration without being annoying to type etc.
- Code:
+=====+=====+====+
| IWT |TRINK|STUN|
+=====+=====+====+
|FOLL|ASSIS| DPS |
+=====+=====+====+
The idea here is that I can simply and comfortably roll my fingers on my left hand over follow-assist-dps or iwt-assist-dps. The trinket button is for pvp if I get feared, etc. I don't need to assist on every roll, but it is more comfortable to roll over 3 keys than it is to repeatedly hit 1 key or even 2 keys. Try tapping just one finger in the same spot over and over and your hand will start to hurt, but rolling your fingers can go on for hours
The DPS key does a couple different cast sequences per character so I don't need multiple general DPS keys, and I manual assist instead of auto assist because I personally like it that way. I've got a small handful of other keys that are used in combat for AoEs, etc as needed (not so much AoEs when playing paladins, consecrate is part of my rotation), but that right there is pretty much all that's needed in a typical encounter. So anyway, I am typically spamming either follow or IWT, and usually only IWT if I'm not in, or can't get in, the proper position.
Example .. Skadi fight. The one thing that makes Skadi difficult for a melee team is his whirlwind, which he chases while doing for several seconds. First, I keep my healer standing a short distance away, and I hit a toggle key to stop my healer from doing either IWT or Follow when I hit the key. I usually prefer to play as my tank, so this allows me to spam my follow key while tanking. When he begins to whirlwind, I switch to my healer, hit the auto-follow key, and run away. Everyone follows, nobody gets hurt much because they're on their way to the healer and he's running in the same direction. When whirlwind is over, I hit the IWT key and everyone starts to attack Skadi again. With IWT, I have the option of playing as the healer if I want to, so I don't need to switch back to the tank. I can just sit there and spam IWT and play as the healer for the rest of the fight. Sometimes I do, sometimes I dont. But if I switch back to the tank, I go back to hitting the autofollow key instead of IWT, because it's annoying to watch my guys run in circles in PVE.