True, that's how defense works in D2.
Though resistances work in the way you mentioned, reducing the damage taken by a percentage. There are also mods like "damage reduced by x%", "damage reduced by x", which reduce the physical damage by percentages and integer numbers respectively. Also, there are similar for each and every element.
Corpse explosion is an interesting spell though, since the damage it gives is divided into 50% fire damage/50% physical damage. Dual damage type spells are often very useful, since immune monsters still can be killed in most cases
There is such a jewel (unique, however) that increases the elemental damage and reduces the elemental resist of one of the elements by 3-5% each, as well as gives a few other bonuses. Read here for complete stats/info: http://diablo2.diablowiki.net/Unique_Jewels
I'm not sure if the +%damage adds to the damage from your Corpse Explosion since it is a fixed value (60-100% of corpse life), but at least there's a bit of -%res.
On the other hand, 60-100% of the corpse life means that if you have two corpses and explode them, all other monsters nearby will be dead too (assuming they're not tougher monsters), and you'll also have a bunch of new corpses to explode.
Because of this, this is by far one of the best methods to clean out a large room full of monsters, since the number of monsters is not a factor slowing the killing down.
With a decent number of +skills, the radius is big already. If you at the same time curse the monsters with amplify damage, the room is wiped clean before you know it.
+% Fire Skill Damage doesn't apply to Corpse Explosion's fire damage (although + Fire Skills will increase its skill level) but -% Enemy Fire Resistance does. Fire Resist -% from Conviction and Lower Resist will also increase CE's fire damage, Damage Resist -% from Amplify Damage and Decrepify will increase its physical damage and equipping a Sanctuary Aura When Equipped item will pierce DR % of undead when the Necromancer equips it.
It's always better to cast AD rather than LR on monsters that aren't Immune to Physical. Also, whenever possible you should try to ensure that your character level (clvl) is at least equal to monster level (mlvl), since when clvl < mlvl CE's damage is multiplied by clvl/mlvl.