Well, for starters, you have the choice to play on either Normal, Hard or Lunatic. In Fire Emblem terms, Normal=Easy, Hard=Normal and Lunatic=Hard, more or less. The only thing the difficulty really effects are the enemies' stats, I believe. After choosing your difficulty, you have the choice between choosing either playing Classic mode (which is permanent death for units that fall in battle) or Casual (which allows your units to be revived after a battle if they are defeated). I'd recommend playing on Hard mode as Easy can be a bit...boring (but that's just my opinion).
The Asset/Flaw system not only determines your Avatar's stats but it also determines your future child(ren)'s stats as well; I'd recommend going to Serenesforest.net for more in-depth info on the numbers.
I usually tend to make Luck my Flaw, while my Asset usually depends on what kind of unit I want my Avatar to be as well as who I decide to marry. I believe Luck determines how high an enemy has the chance to deal a critical hit on you but it doesn't really form much of a hindrance in the long run. If you want to lower Resistance, it shouldn't be that big of a difference, either, I just prefer to leave my defenses alone.
A unit's stat gains are determined through a combination of RNG, a unit's unique growth rates and the unit's class's growth rate. The enemies they defeat don't have any bearing on that besides providing EXP. I direct you back to Serenesforest.net for more information on this as well.
I think that's it. Have fun playing~!
