1. Blocking will reduce the damage, but it wont prevent it. You need a Shield or an weapon to parry. (later you can buy special defense weapons)
2. Yes. The trick is: dont play in Diabolo style (fast clicking until enemys death). Hold down LMB and look on the enemys feed, during the attack look up. So your char make a Move to pass enemys block. Or try to walk forward and hold down LMB. So your char jump forward and make an impact hit! Try out all moves by holding down LMB or short clicks during RMB is hold etc etc...
3. Most human enemys dont attack when you stand still with holding down RMB and a Shield. Unless you try to attack. Use this for heal spells or potions.
If the enemy attacks with a blade weapon (Not a Club, no Axes etc), then you block with a shield so the enemy becomes an flashback and you have a very good moment to start the counter strike.
4. Buy a spell.. like stunning enemys or fireball, whatever you want. After you Block an opponents hard hit with your Shield you shout strike back. Your enemy will move some steps Back, now its time for the spell, during you cast this spell, move forward and hold down LMB. This is the most effective fight style in oblivion / Nehrim in my opinion. If you want to play a mage only char, so nehrim will be really hard. Better dont try this in your first play.
Very Importand: In Nehrim: If a enemy lay down on the ground, so dont look down to attack him. Just a litte bit.