OK, so quick breakdown (as I try and avoid wall-o-text).
Soft cap means that there is an effective limit, but having an amount over said limit is still there even if it doesn't give you any benefit.
Hard cap means that once you hit the cap, anything over the cap is discarded.
This comes into play if you get hit by a debuff effect or an enemy has a buff on them.
The Defense soft cap for most enemies is 45%. This is due to the game forcing all attacks to have no less than a 5% chance to hit and no more than a 95% chance to hit, with NPCs typically having a base chance to hit of 50%. Chance to hit and defense are straight subtraction math (i.e. if my ToHit/Accuracy is 70% and my target has 10% Defense, then I now have a 60% chance to hit that target). If you get your defense above 45%, since it's a soft cap, this acts as a buffer zone in case you run into an enemy with a ToHit buff (Nemesis, DE, etc...) or are affected by a defense debuff.
One important note about Defense is that you will use your best defense against an incoming attack. So say you're targeted by a Fireball attack. This attack deals Fire and Smashing damage, and is an AoE. Thus the game will look at your Fire, Smashing, and AoE defense and pick the best one. It does not combine them.
Damage Resistance is hard capped, based on archetype (75% for Blasters as mentioned before). Any resistance above 75% is just discarded into the aether.
TL:DR
On a Blaster, ignore Resistance and go for Defense. Smashing and Lethal damage are the most common damage types in the game, so getting Smashing and Lethal Defense to 45% or higher makes you very hard to hit for 99% of the NPCs in the game.