The Hosts file should be identical to the following, unless you had reason to alter it:
##
# Host Database
#
# localhost is used to configure the loopback interface
# when the system is booting. Do not change this entry.
##
127.0.0.1 localhost
255.255.255.255 broadcasthost
::1 localhost
There may be one additional entry if you are using IPv6 compliant devices:
fe80::1%lo0 localhost
resolv-conf normally contains only one line pointing to your DNS nameserver, which can be the address of your router assuming it receives its DNS entries supplied by your ISP. It should be inconsequential unless the telnet address needs to be resolved, and you wrote you're supplying it directly.
Did you contact Lutron? Perhaps they can offer something more constructive. Their engineers are pretty good, but don't let them shoot you down if they say they don't support Macs. Perhaps you shouldn't even offer that information. There is absolutely nothing Mac-specific about Telnet. There may be something on your Mac preventing it from working though, which would be beyond anyone's knowledge or control but yours.
Can I compare directories on the two machines ?
Sure, but they should be functionally identical to the above examples. Let me know what you find out.
Edit to add: if you are using any non-Apple "anti-virus" junk, don't. That just goes without saying.