Why does the Dragon King Greataxe do less damage than the Zweihander

It is the amount of damage reduced. For example, if a shield has a physical damage rating of 100, 100% of physical damage is reduced when blocking. This also applies to the other types of damage (fire, magic, lightning) that shields have ratings for as well.

This is not to be confused with the attack rating that all shields also have, which is the amount of damage the shield would do if you used them to attack instead of blocking (you can use shields as a weapon if you equip them in the right hand).

Note that if you ever feel like doing this, all shields deal strike damage.

Wielding two-handed increases your effective strength by 50%. So, if a weapon requires 24 strength, you can two-hand it with just 16.

This same rule does not apply to dexterity though! You can't increase your effective dexterity by dual-wielding. If a weapon has a dex requirement, you need to meet that requirement fully to be able to wield it effectively.