Why Fulmars did not escort the raid

Could Fulmars keep up with the Swordfish, and why were they not used over Taranto?

Yes. They were fast enough, but were kept for daytime fleet defence because the night raid was not expected to meet Italian fighters.

Fulmars were much faster than torpedo-laden Swordfish and could catch them after a delayed launch. They did not accompany the Taranto force because planners did not expect fighter opposition during the night attack. Illustrious kept them for daylight defence of the carrier group. A two-carrier force including Eagle might have had enough aircraft to send Fulmars as bomb or flare support.