Out-File
defaults to unicode encoding which is why you are seeing the behavior you are. Use -Encoding Ascii
to change this behavior. In your case
Out-File -Encoding Ascii -append textfile.txt.
Add-Content
uses Ascii and also appends by default.
"This is a test" | Add-Content textfile.txt.
As for the lack of newline: You did not send a newline so it will not write one to file.