Noob questions

I'm rather new to the game, so I have few questions:
1) I've noticed that my HP increases when I level up (player level), but does my damage also increase?
2) Does leveling up provide progressive bonuses or flat ones (is the formula like ~base stat~ + ~bonus~*~level~; or ~base stat~ * ~bonus~^~level~)
3) How exactly does fire damage work? Different instances of the same trap type don't stack or different instances from the same player don't stack, or they don't stack at all (no matter the player)?
4) How does armor work? Does 25 armor reduce damage taken by 25% or does it reduce damage taken by 25 (flat amount)?

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