Guarding limits the number of legal targets within a zone for melee attacks. Thus, if you wish to make a melee attack in a zone that has any guards in it, you can only target one of the guards.
After you select your target, you go through the normal combat steps:
1) Declare Attack (must be against one of the guards)
2) Avoid Attack (Your knight could roll his Defense here)
3) Roll Dice
4) Apply Damage and Effects (Your Knight takes damage)
5) Additional Strikes (If the attacker has Doublestrike or Triplestrike)
6) Damage Barrier (if applicable)
7) Counterstrike (all guards gain the counterstrike trait for their quick action melee attacks. Your knight would make his counterstrike now)
8 ) Attack Ends (Adramalech could possibly use his sweeping trait now to hit another creature, if that's the attack he chose during step 1)
For your second question, Piercing +X is listed in the codex and it reduces the targets Armor value. It does not reduce their Defense if that's what you're asking. It has absolutely no interaction with the unavoidable trait.
Against your Knight, if Adramalech had Piercing +X, that would come into play during Step 4: Apply Damage and Effects. Let's assume he rolled 5 damage and had Piercing +1. Your Knight has 3 armor. Therefore your knight takes 3 Damage. This is because the piercing reduces your armor to 2, and then your 2 armor is subtracted from the damage dealt.
