Single atoms in dipole microtraps or optical tweezers have recently become a promising platform for quantum computing and simulation. Here we report a detailed theoretical analysis of the physics underlying an implementation of a Rydberg two-qubit gate in such a system—a cornerstone protocol in quantum computing with single atoms. We focus on a blockade-type entangling gate and consider various decoherence processes limiting its performance in a real system. We provide numerical estimates for the limits on fidelity of the maximally entangled states and predict the full process matrix corresponding to the noisy two-qubit gate. We consider different excitation geometries and show certain advantages for the gate realization with linearly polarized driving beams. Our methods and results may find implementation in numerical models for simulation and optimization of neutral atom based quantum processors.