In order for a Damage Barrier to trigger, the creature who has the Damage Barrier must suffer from a "successful" melee attack. Now, the word successful can be a bit misleading. The creature does not have to take damage from a melee attack, it just has to have a melee attack made against it. This means dice are actually rolled against it. If the attack is avoided or cancelled for any reason (such as a Daze condition or a Defense roll) then the Damage Barrier does not trigger. However, if all of the dice roll blanks or are absorbed by armor, the Damage Barrier still gets to hit back.
An attack can never be reduced below 1 die, as others have stated. The Flame -2 trait would reduce the Circle of Fire to a 1 die attack and reduce the effect chance by 2.
Flame Immune creatures can indeed walk through a wall of fire without needing to roll anything against them.