Hi. 
I found a pretty good article about IoT on Salesforce 

https://blog.enree.co/2018/05/salesforce-iot-lets-play-the-game-with-salesforce-iot-part-2-setup-an-orchestration.html

in this example, REST API is used.

But in real life, it will not be the case I assume.
For IoT devices, it shall be some streaming API used to constantly update the device temp, level, or other params. 

In the documentation of salesforce, they compare streaming API with Platform Event. 
But in this case, IoT application, I need to use some API to create the platform event first, then I process this platform event with Orchestration. 

What Salesforce API I should use for constantly updating IoT Data and how? Create a connected App? this app should push the data into salesforce? 

For example, I would like to update temp reading every sec and update my related Salesforce object info every sec. 

With the use of orchestration, l will generate new cases. 

Any limitations on that? 

I also wanted to have trends of IoT devices in Salesforce? is it possible at all? 

There is such a thing as historical reporting. But is limited to 1 snapshot for the day and it is used for a different purpose, for sure it is not for trends recording.