1. There's really not much to it. You have 4 stances in MK: neutral (doing nothing), block, crouch, and crouch block. There are 4 main hit levels: high, mid, low, and overhead. Each of these moves will impact your opponent differently depending on their block status.
If you are in neutral (doing nothing), you can be hit by all 4 hit levels. Obviously.
If you are blocking high, then you will block out high, mid, and overhead attacks. Low attacks will hit you.
If you are crouching, high attacks will whiff (miss completely). Mid attacks will hit most characters. Overhead and lows will always hit.
If you are crouch blocking, you are immune to all attacks except overhead. All other attacks will cause chip damage, though.
This sets up a 50:50 situation when your opponent is roughing you up. Do you block high or low? If you block low, you can be hit by overheads. If you block high, you can be hit by low attacks. You (generally) can't defend against both at the same time, so you must guess based on your opponent's style. There actually is a way to defend against both vs. certain moves and characters, but that's a more advanced concept (fuzzy guarding). Focus on other things first!
The only confusing part is that the training module in the game doesn't give you the correct hit levels. When it says medium, it actually means overhead. When it says high, it could mean either high or med. This has been fixed in Injustice, but I have no idea why it hasn't been patched in MK.
When I played Sub-Zero, I generally always held the block button. I would let go when I wanted to move, dash, attack, or throw. But the general rule is that I always held the block button. When I was being spammed by a projectile character, I would duck and then let go of block so that the projectile will safely go over my head and that I wouldn't be slowed down due to chip damage. Other characters have their own style for blocking.
From here, just practice!
2. When choosing a character, I always go through a tier list until I find a character that fits my style. If you aren't "feeling" a top-tier character, then they're not going to work for you. Choose another one. It's not always about tiers, but it can be. I chose Sub-Zero, and he severely limited my success in MK. He has some of the worst matchups in any fighting game I've ever played.
Good beginner characters include Smoke, Kenshi (way too spammy for me), Scorpion, Ermac, or Noob. Just be careful with some of these. Learn the difference between safe and unsafe moves. Because the first mistake that everybody makes in MK is to spam Scorpion's teleport. This is unsafe. If your opponent blocks this, he'll get a free combo. I play online Scorpions that, even after I punish 3 or 4 in a row, will continue to teleport on me randomly. Don't do that!
EDIT: Unless you're playing Injustice. Spamming Scorpion's teleport in injustice (coupled with random j3 and j1) will pretty much guarantee a win against everybody, even professional gamers.
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