Hey there,
So the problem I have has to do with damage reduction, or rather the lack of it.
I do understand that in d&d armor class means evasion really and damage reduction is achieved by evading. But it is immersion breaking beyond believe when my bareass naked mage takes the same damage from a hit as my heavy armored dwarf.
No, you don't understand, actually. AC is not "evasion." An attack that fails to "hit" does not necessarily miss. In the case of heavy armor, failing to overcome AC might mean hitting the armor and the attack having no effect. For a dexterous character, it could mean they dodged.
The problem is you are misinterpreting what an attack that fails to deal damage really is. Heavy armor DOES reduce damage taken, by making it less likely that you take damage in the first place. Your "immersion breaking" stems from a fundamental misunderstanding of how armor works. You do not take a diminished damage while still taking damage; you take NO damage, or the armor didn't work.
An easier fix to this "problem" is to have the "missed" attacks have different animations depending on the kind of armor you are wearing. Heavy armor should have a higher chance for the attack to land, but just bounce off harmlessly. Light armor should be more evasive. Medium armor can be a mix.