What are lures for

Parrying on lower levels works only when you are facing the enemy.

The Level 1 of the Parrying ability from the Training tree unlocks the ability to parry blows from all directions, not just the one you are facing.

Regardless of this, timing and sufficient Vigor points are prerequisites for parrying.

QTE stands for quick time event, also known as "Press X to not die".

[...] a Quick Time Event (QTE) is a method of context-sensitive gameplay in which the player performs actions on the control device shortly after the appearance of an on-screen prompt. It allows for limited control of the game character during cut scenes or cinematic sequences in the game.

The "Difficult QTEs" option controls whether you see quick time events at all during the game. Turning it off removes them entirely, with the exception of the ones involving the fistfighting system.