I don't recall the xml for each weapon, but some magic weapons have a portion that is usually "normal weapon damage" and a portion that does extra element type damage.  In the case of the ranged staves I believe it is all element type. 

I also don't believe the axes should have had a problem "hitting" the enemy.  Damaging them, however, should have been something akin to just a regular axe hit. 

That's exactly how it works.  If you look at the detail screen, and hover your pointer over the "attack" value, you will see a break down of the damage, with types.

For example, a champion may have a sword, which does cutting damage, an amulet that adds cold damage, and an enchantment that adds fire damage.  When he actually lands a blow (accuracy vs dodge) the cutting damage get attenuated by the cutting defense, the fire damage gets reduced by the percentage of the fire resistance, and the cold damage, respectively by the cold resistance.

So if you have a dragon cloak, and a Nature's Cloak enchantment boosted by three Earth shards, you are still not invulnerable to a guy with a fire axe.  You will still have to rely on armor (cutting defense)  If the armor absorbs the damage, you see a "Chink" instead of damage.  Now, I am not sure whether you still take any damage, but if you do, it's probably 1 hit point.