Armor and Resistance both function the same way for different damage types, so I'll stick to explaining armor here.

Armor is a damage reduction stat displayed in game, but the scaling of this damage reduction diminishes and overall is not entirely helpful for determining the value you're getting out of armor points. The actual formula used to determine armor is equivalent to a direct linear effective HP multiplier increase, which represents the amount of damage that can be taken with a single point of health.
This multiplier starts at 1x, representing one point of damage per one point of HP, and every point of armor increases it by 0.005, or .5%. 100 armor represents 1.5x EHP, effectively increasing your health by 50%. 200 armor represents 2x EHP, 550 armor represents 3.75X EHP, and so on.

The formula for the effective health multiplier is:
1+(0.005*armor)

Alternatively, the final displayed armor damage reduction can be found with:
((1/(1+(0.005*armor)))-1)*100

Negative armor uses a different formula, linearly increasing the % of damage taken by 0.5% per armor point. This can be converted to an EHP multiplier with:
1/(1+(0.005*armor))

In summary, armor has a linear effect on the amount of damage you can take, and changes in armor value become more significant the closer your armor is to 0, and are most significant in the low positive range. Eventually NG+ will send most players far into the negative values, but characters like Paladin or Wizard that have significant armor buffs can stay in these ideal zones quite far into the end game.

Evasion is a chance to avoid any attack entirely, which is equivalent to a direct reduction of average damage taken.
In most games, evasion stacks are additive, meaning +5% evasion is a 1/20th damage reduction if you have no evasion, but a 1/2 damage reduction if you already have 90% evasion. This style is straightforward and encourages either skipping dodge entirely or building specifically for it, but HoH2 uses multiplicative evasion.

If you already have 30% evasion from one source, and another source gives 10% evasion, these will not add up to 40%. Instead, the 10% evasion will remove 10% of the remaining chance to be hit, which is 70%, leaving the total evasion score at 37%. Every additional source similarly will be multiplied based on the remaining chance to be hit.
You can view this as each evasion chance being applied separately, with each attack against you needing to succeed on *both* a 70% hit chance and a 90% hit chance before succeeding.

Final hit chance can be calculated with this formula:
(1-evasion1)*(1-evasion2)*(1-evasion3)... etc

This does NOT mean that evasion becomes less effective each time you get it. It means that evasion remains exactly as effective as it says it is. Getting an additional 5% evasion will always reduce the amount of attacks that are actually hitting you by 5%, regardless of whether you had 0% or 70% evasion already. This means that rather than evasion being either useless or invaluable to different builds, it is always equally good.


Parry is a separate form of evasion that applies only to enemy melee attacks in the direction you're facing, but can be acquired in higher values. It uses the same formula as evasion.


Crit rate interestingly uses this same formula to avoid ever reaching 100% crit rate, but due to how crit rate affects your DPS, it actually does become less valuable the more of it you have, and this multiplicative style of math only helps reduce the effectiveness of stacking extremely high crit values, but regardless, crit rate is generally an excellent stat.

Due to the nature of time-based abilities, manually testing cooldown has some level of error, but my observations are as follows:

Cooldown reduction is a likely multiplicative decrease in the amount of time a spell needs to recharge. This does not apply to weapon skills.

Cast speed is a linear percentage that also directly reduces cooldown by increasing the speed at which spells recharge. The cooldown of a skill is divided by your cast speed, so 30s of cooldown with 60% cast speed would be 30/1.6 = ~18.75s.

(Cooldown*(1-cooldown reduction)*(1-cooldown reduction)...)/skill speed

a 30 second spell with one source of 25% cooldown reduction, two sources of 15% cooldown reduction, and a cast speed of 160%, would look like this:
(30*.75*.85*.85)/1.6
For a total of ~10.16s cooldown

Spells also have a short cast time before they begin cooldown, which is usually anywhere from .2-.5 seconds long. Cast speed reduces this time as evidenced by Fan of Knives, a rogue ability with a 0.2s cooldown but a slightly longer cast time that causes it to be capped at two casts per second. Cast speed disproportionately improves the cast rate of Fan of Knives for this reason.

Secondary weapon skill cooldowns only seem to be affected by weapon speed in the same way that cast speed affects spells.

Every time you beat the game, you unlock a new run difficulty referred to as New Game+, starting at NG+1, going into NG+2, etc. The first level of NG+ causes a few changes to increase difficulty, and unlocks some new content, and each level afterwards increases difficulty and rewards consistently.

Unlike New Game+ in other games, you select the difficulty of each run at the start, and entering any run at a level of NG+ does not cause the loss of any equipment, town upgrades, or progress.


Player level cap increases
Once you beat the base game, and for each level of NG+ that you beat and unlock, your character's level cap increases by 5. This effectively increases the level of your base stats, the amount of skill and attribute points available, and the benefit of your class title. In addition to this, for each NG+, you also unlock 3 "Elixers" that can be found throughout future runs, which permanently increase your attributes by 1-5 points. These can be found in cursed containers or after beating the final boss.


Enemy stats increase
Enemy health increases significantly, and further increases each difficulty. Per NG+, enemy resistance and armor increase by 33%, and their damage increases by 5%. Experience rewards from enemies increase by 33% as well. The increase of enemy damage is small, but is modified by the change in player armor and resistance.


Player stats decrease
For each level of NG+, player armor decreases by 120 and resistance decreases by 65, which is then for some reason increased by 1, for values like -119, -239, -359, etc. For dex/int builds with low armor, this may eventually make armor and resistance somewhat insignificant stats at high level games.


Gold and mineral gain Increases
There seems to be a flat 20% increase to all gold, mineral, and gem gain per NG+ level, which stacks with any other bonuses, although it is not listed in stats. Experience gain also increases, although I cannot confirm exactly how much it increases.


Item level and tier Increases
You can find equipment up to 5 levels above your current cap, and up to 10 levels above your current level during a run. Higher NG+ levels provide far higher level equipment, and equipment also have tiers, identified by the base item name (ignoring enchantment terms). For instance, an Elven Bow is stronger than a Short Bow, and a Wyrmwood Bow is even better in base stats. Higher equipment tiers improve the base stats of the weapon or armor, and increases the stat requirements, but enchantment stats are still purely based on item level. Dex and Int armor also improve the default buff they apply (such as increased crit damage).


New starting drinks and buffs unlock
If you select NG+1 or higher as a run's difficulty, you may start the run with one of three new drinks, a new food, and a new chapel enchantment, all related to shadow curse. A new set of four trinkets also can appear during NG+ runs, which are also based around shadow curse. All of these act as a way to counter the increase of shadow curse gain.


Shadow Curse increases
Starting on NG+1, shades, the ghost enemies, will give shadow curse. Each point of shadow curse initially reduces your armor and resistance by -3 per NG+ level, however this value further decreases by -0.66 per NG+. This value is then reduced by 1, as with the fixed armor decrease.
23 shadow curse on NG+4 gives:
-(23*(3+0.6666x4))+1 = -129 armor and resistance

Cursed chests and material crates may spawn, which give extra loot but spawn waves of shades to curse you upon being opened. Cursed chests drop two trinkets, with a chance of the extra trinket being a cursed trinket. Cursed crates drop runestones for enchanting.

Small pyres (braziers) spawn from NG+1 onwards, which initially each decrease your shadow curse by -5. however, this value decreases in NG+2 and NG+3 until it stays at a -3 reduction of shadow curse.

If you wish to entirely negate shadow curse in your runs, taking the "Stinging Curse" drink, along with the "Righteous Flames" and "Safe Corridors" architect modifiers is generally enough to end each run with 0 shadow curse.