I have an XSL-FO stylesheet for traditional documents. It contains some
standard headings like "Preface", "Table of Contents" and such. Sometimes I
want these in English, sometimes in Swedish. Sometimes I want A4, sometimes
US Letter. Is it possible to avoid having more than one stylesheet for
these variations?

The way I can think of would be to have a wrapper stylesheet for each
variation that only contains these few things that are different. Is it an
even better solution in XSLT (1 or 2), that makes it possible to send
parameters to the stylesheet on the command-line?

Checkout xsl:param. XSLT processors in general allow
you to pass parameter values on the command line.