Kahless, the nemesis idea is really funny/cool, and I'd be more than happy to work with you on a shared antagonistic background.
Forged, the character as-is isn't permanently in his transformed state, though it wouldn't be hard to make him so...and that would also give you summore points to spend.
The way the tradeoffs work is that Dodge and Toughness are considered to be on a kind of balancing fulcrum. If both are equal, their maximums are the same as your Power Level. In our cases, that's 10. If you reduce one maximum, the other maximum goes up. So if your Dodge is maxed out at 8 (ie - you can never have more than that), then your Toughness is maxed at 12.
Similarly your attack bonus and your effect rank is that kind of a scale. So your Affliction 10 means you can have an attack bonus of 10 with that attack as well.
There IS a limit on how many points you can 'swing' the arms of this balance. And in general you will not want to hose Dodge TOO much, or you become easy meat for things like Multiattack and Power Attack and so on. Your Impervious is really good at 9 ranks, but that still only blocks damage ranks of 5 or lower. You're bulletproof, but most super-level attacks will go right through that.