There are 3 game style modes: Action, RPG and Story.
Action makes all dialogue choices automatically, predetermined by Bioware. Combat is manual, similar to the previous games.
RPG is business as usual, allowing you manual dialogue choices and normal combat experience.
Story is manual dialogue choices, with minimal combat. Story mode is locked to the Narritive Difficulty.
The actual adjustable difficulties are similar to previous games:
Narrative This difficulty level is intended for players who are more interested in story than combat. Shepard and squadmates are
stronger, weapons are easier to handle, and enemies are weaker and
less aggressive. This is a nonrepresentative Mass Effect 3 combat
experience.
Casual This difficulty is intended for players inexperienced with shooters. Shepard is stronger and does more damage, weapons are easier
to handle, and enemies are slightly weaker and less aggressive.
Normal This difficulty is intended for players with experience playing shooters and RPGs. This is the baseline Mass Effect 3 combat
experience.
Hardcore This difficulty level is intended for players looking for a challenge. Enemies are powerful and aggressive. Advanced gameplay
skills required.
Insanity This difficulty level is intended for players seeking the ultimate challenge. Enemies are tenacious, react quickly, have heavily
upgraded weapons, and use their powers mercilessly.
To answer your question succinctly: Mode determines manual or auto dialogue and combat difficulty. The adjustable range modifies combat for RPG and Action modes. Story mode is locked to Narrative.
Armor, Shields, and Barriers are all "Defenses" that protect enemy (or Shepard's) healthbars from harm.
For Shepard personally, its largely irrelevant. Only two of the six possible Shepards have barriers (Vanguard / Adept), and none of the six have armor. For Shepard, Barriers and Shields differ only in color (purple vs. blue), as any armor piece that improves shields will likewise improve barriers.
Shepard cannot get armor at all; the Fortification power, despite claiming to be armor, is really a damage reduction, like Tech Armor (which, despite the name, is actually advanced shield tech).
For enemies, it matters a little more.
Armor
Indicated by a yellow health bar. Vulnerable to fire attacks, like Incinerate, and damaging biotic attacks like Warp and Reave.
Common to Cerberus Robots, Environmental obstacles, and reaper forces.
Slow firing weapons like Sniper Rifles, Heavy Pistols, and Shotguns tend to do better damage to armor.
Finally, Armor can be "weakened" by freeze effects and "penetrated" by weapon mods, or Armor Piercing Ammo. Incendiary Ammo, Warp Ammo or Armor Piercing Ammo, will all do additional damage to armor.
Barriers
Indicated by a purple health bar. Vulnerable to damaging biotic attacks like Warp and Reave, and by Concussive Shot.
Common to biotic users.
Fast firing weapons like SMGs and Assault Rifles do better damage to barriers.
Barriers also take additional damage from Warp or Disruptor ammo.
Shields
Indicated by a cyan health bar. Vulnerable to tech attacks like Overload and Sabotage.
Common to Geth, Cerberus, and certain Reaper forces.
Fast firing weapons like SMGs and Assault Rifles do better damage to Shields.
Shields take additional damage from Disruptor ammo.
Best Answer
It is simple as this:
The Total Military Strength is the numerical total of all of your War assets.
The Effective Military Strength is that total, multiplied by your Galactic Readiness.
Judging from your numbers, your Galactic Readiness is sitting at 50%
The Effective Military Strength determines your ending.