Does anyone use these spells? if so how?

That always confused me. I mean, what the hell would you be rallying. If anyone is going to fight for you, you don't need to use it, if they are going to run away, they are probably some poor farmer who isn't going to be much help.

My guess, Bethesda planned for some enemies to do fear on your followers, but didn't have time to program that in.

Umm, they increase the damage and health of your followers, and the expert spell inreases their combat prowess as well, so if you have a follower that you got at a low level, you can rally and use spells of that nature to increase their stats.

They've had this spell effect in since at least Morrowind, so it's been a few games for them to decide that they should either program fear spells on followers or leave out the rally spell.
Command is a more useful effect, but they left it out in Skyrim.

I think the MetalGod is close.

The attack and pathing AI for followers really isn't bad. BUT, they don't discriminate, they'll run in front of arrows that are nocked and ready to fly before they even know there's anything to fight, and they'll fire through you just the same. SO, I'm guessing that there were plans for "retreats" that snagged on the whole "avoid friendly fire" thing.

It does seem that Rally is more of a counter spell, but there isn't a spell for it to counter really. Rally should be more of a command to gain help during combat, Courage should be a temporary stat increase. Or both should just be replaced with Command.