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2. Absolutely, go for it.
3. In my opinion, upgrading armor to the last level is usually not nescessary, as it does not improve overall defense/poise by a large amount. Better invest that slab in your main weapon.
But yes, as the amount of titanite slabs you are guaranteed to find per playthrough is limited to two (or three?), the amount of armor sets you can upgrade to 100% is somewhat low.
You can also farm for titanite slabs in the drained new Londo Ruins area by killing lots and lots of Darkwraith knights, but only if you really, and I mean, REALLY enjoy grinding.
Here is a quick overview for each upgrade material and where to find it:
https://darksouls.wiki.fextralife.com/Ore
Be sure to max your item discovery by having 10 liquid humanity (the big number showing next to your healt/stamina bar) and to put on the Covetous Gold Serpent Ring OR mimic head, if available.
You should definitely prioritize upgrading weapons (and maybe even your shield) before armor, but upgrading the armor will help against weak enemies in particular.
Your question got me thinking about some experiments I did a year ago but never followed up on. I was wondering how useful upgrading armor is in practical terms, so I spent a couple of hours getting hit by various enemies in controlled circumstances while wearing different upgraded or unupgraded armor sets and writing down how much damage everything did.
Some of the results were pretty interesting when I started crunching numbers! Dark Souls's damage calculations are really complicated and depend on variables such as your level and how much humanity you have, but my findings should give some decent ballpark estimates of how much armor helps you.
As a sidenote, for these experiments, I always kept the head slot empty because I know most builds will want to wear something like the Mother Mask or Crown of Dusk instead of armor.
Against a weak attack, fully upgrading the knight armor was equivalent to having +50% HP compared to the unupgraded knight armor. Wow! Simply wearing the unupgraded knight armor vs being naked was only about +28%, so upgrading is a more dramatic help than just putting on the armor in the first place.
Against a medium attack, upgrading the knight armor was equivalent to having +22% HP. That's not amazing, but it's good. Simply having the unupgraded knight armor vs being naked was only worth about 10%.
Against a powerful attack, upgrading the knight armor was only worth +15% HP. It helps, but it's not a huge difference. Unupgraded knight armor vs naked was only about 7%.
For another experiment, I did the same tests using upgraded and unupgraded Giant armor instead of knight armor.
Obviously, switching from naked to unupgraded giant armor is a bit more helpful than switching from naked to mere knight armor. Against weak, medium, and strong attacks the unupgraded armor is worth about 66%, 28%, and 20% more HP.
Interestingly, the % increase in effective HP from upgrading the Giant armor compared to unupgraded Giant was was very similar to the % increase from upgrading Knight armor compared to unupgraded Knight. Against weak attacks it was worth about +50% HP. Against medium attacks about 22%. And against strong attacks about 15%
I also noticed a few other interesting things:
1) Armor which upgrades with twinkling titanite (just a Giant armor) typically ends up with defense values about 50% higher than it started.
2) However, armor which upgrades with regular titanite (such as Knight armor) typically ends up with defense values about 150% higher than it started!
This factor alone makes most twinkling titanite armor fail pretty hard after everything is upgraded. Which is a shame since a lot of those sets look very cool.
The Giant's Set definitely still has a strong niche despite upgrading with twinkling titanite since it offers the very best defense in the game and the Chest + Legs + Gloves happen to hit a critical poise threshold
3) One upshot of the pattern that armor sets tend to get better by similar %s when upgraded is that you get a lot more defense per piece of titanite if you upgrade an armor set which has better defense to begin with. So for example spending some titanite upgrading Knight armor will get you a lot more defense (and thus more survivability) than spending the same amount of titanite on, say, the Bandit set. The bandit set does actually require a little bit less titanite, but still
4) Considering that you have to invest a massive amount of titanite to upgrade armor (upgrading chest, legs, gloves fully would cost 18 shards, 18 large shards, and 18 chunks which is more than 2x what it takes to fully upgrade a weapon) it's definitely not worthwhile until you are absolutely swimming in titanite.
5) Armor will tend to become much less useful in higher NG+ cycles since enemy damage keeps scaling up but your armor never gets more effective
My favorite armor sets are A: thief fully upgraded, B: Stone Set, C: Gold set from down by Centipede demon, and sometimes D: pyromancer's but it is ugly AF
Need poise: Stone Set, Great Shield of Artorias, Havel's ring, Wolf ring or whatever.
Thanks for the suggestion, I might do that.
One of these days I'll be making a let's play video of dark souls and talking about a lot of the mechanics as I go, so I'll put the info there too.
I like some of the armors you mentioned, but aesthetically a few of them are too ragged for my taste. I'm very fond of the Giant armor set (ragged cape notwithstanding) as well as the basic knight set. The knight set is also extremely good at poise/weight, so pieces of it can easily be used for optimal poise setups.
But you have to take this with salt. Your tests are likely against mook enemies. Against boss or semi-boss enemies this 50% has little to no value when their damage is so high compared to your pool of HP that it hardly matters.
In Dark Souls games armor is quite secondary a thing due to the small HP pool the player has. Obviously if you have 10 000 HP and 2000 HP plays a big role. When you have 10 000 then the armor reduction becomes efficient, e.g. it triggers more often.
I am recently playing Diablo 3 a lot and I can tell you that armor and HP in Diablo 3 is big thing and go hand in hand. Dark Souls is nothing like that because the player HP and toughness is artificially reduced. Best seen in NG+ games where the whole concept of armor breaks. That is why games like Diablo encourage you to keep playing into Torment difficulties quite successfully while in Dark Souls NG+ are totally death/rinse/repeat kind of experience.
Dark Souls is not well though in NG+ terms. I don't play any NG+ because there is no incentive mechanically to play it. Unlike in Diablo 3 which scales all the way. But DS stops scaling at NG 1 and any further attempts are just masochistic and unrewarding.