1) Undead take damage on their Toughness characteristic instead of on their wounds. Does giving them armor mean they can take more damage, as they gain an enhancement bonus to toughness, or is the damage done purely to their unmodified toughness characteristic?
2) Also, instead of wound increases for some class levels, do undead gain something like a toughness bonus for being a L5 class?
Undead, and more generally non-living models, take damage directly to their base Toughness Characteristic. Armor helps prevent damage, but does not directly increase the amount of damage they can take.
Edit 7/30/21: Wounds disappear when converting to a non-living model. The exception to this is Demon Engines, which convert extra Wounds from Classes into Increase Toughness X, valued at the base Class' extra Wounds. This Increase does not count against the Max Age Bonus.