Since you've found that dpkg-reconfigure tzdata works, why don't you use it?
If the problem is that it's interactive and you want to script the change, it's possible. The timezone is configured through debconf. You can set values with debconf-set-selections. Then reconfigure the package, telling it not to prompt for anything.
debconf-set-selections <<EOF
tzdata tzdata/Areas select Europe
tzdata tzdata/Areas seen true
tzdata tzdata/Zones/Europe select Paris
tzdata tzdata/Zones/Europe seen true
EOF
dpkg-reconfigure -fnoninteractive tzdata
Applications read /etc/localtime when they first need the time zone information. This is performed by the system's standard library, so you won't find many exceptions if at all. /etc/localtime is usually a symbolic link to a file under /usr/share/zoneinfo, or a copy of such a file. Most applications need to be restarted for a change of this file to take effect.
The file /etc/timezone contains the name of a time zone. Normally /etc/localtime is a link to or copy of /usr/share/zoneinfo/$(cat /etc/timezone). /etc/timezone is used by the packaging system mainly (only?), which explains why changing it didn't have any visible effect.
Remember that you can use a different timezone in a particular application by starting it with the TZ environment variable, e.g. TZ=Pacific/Tarawa date.