What does defense on armor do?
Will a higher defense armor reduce the damage done to me by the monsters?

I've read alot of the beginner guides and it does not describe what defense does. Maybe I"m not looking in the right place.

High defense means less damage from mobs and vice versa. So yes.

I have an additional question to this one, should I go for high defense or go for good stats like EE on armor?

I believe, ee will add additional def to the armor.

yes for armor go for ee str/dex and lifesteal

let's say there is 0 to 1 defense, and 8EE and there is another 5 to 16 defense armor.
should I still go for the 0 to 1 armor?

no

go for the most def

ee isnt effective on a light armor
if your class can wear heavy armors go for them . ee on heavy armors is very effective, too