As you already know, there are two types of spells: offensive, which affects the opponent directly, and defensive, which affects only the champion, his owner, or friendly cards. Champions can be immune to some offensive spells, but only a few can be immune to defensive spells.
When casting a spell, you can only do so during the phases indicated on the card and not whatever you please. Yet, on some cards, it is noted that spells can be cast at any time. Additionally, each spell must have a target. In other words, you cannot have your champion cast Dispel Magic if he does not have anything to dispel.
When a champion cannot continue fighting because of card play, that champion is defeated but returns to its pool. The battle is over then. The defender does not receive spoils of victory since the champion was not discarded. Walls of Fire, Iron, Stone, Force, and Thorns are examples.
In a battle, every attacking champion can play a single card that enables him to continue on, such as the Fly spell. When a defending champion cannot continue to fight because of card play, then combat is over.
The defending champion returns to the player's pool of cards. When the defending player razes the realm, the attacking one can draw spoils.
Dispel Magic, Spell Turning, and Reflection
You may cast these spells in a response whenever another spell is cast. Spell Turning and Reflection work only on offensive spells. Dispel Magic is effective against offensive or defensive spells. If Reflection is cast in phase 4, it reflects all spells back at the caster. If not, it works exactly like a Spell Turning.