Now this is a fairly old topic, but i am a newer player. I have to agree with Vagrant and consider this one of the biggest “flaws” of the game. The fact that defense feels useless. Way too much bypasses defenses entirely. I think that any splash/cleave etc damage should still be mitigated by defense, that in itself would give defense a much larger use right away. Atm the only use i see for defense is for reflected damage based on your defense. And even then its possible to argue that just having a much more durable tank with some other ability (like stun reflect) can still outweigh it.
Personally i think spells should fall into a class and be mitigated damagewise aswell. But in any case defense needs to matter more. Just as your defense matters very little, so does the enemies. Take sigils which usually have the one really tough guy. Your attack not enough? Use cleave/splash/thrust etc and hit the guy next to him.
IMHO all damage that is not %-age based should belong to a type/class and always be mitigated by defense. Obviously it would be a large undertaking to rebalance alot of abilites, but it would bring defense to a useful level. As it stands now, stacking health is just better.