Combat mostly adds up all the bonus of the two units (some are negative), and than multiplied with readiness and unit strength.
So in your case, it is 3 vs 3 from start, which would end you a nice equal fight usually getting 2:2, the readiness difference is small, so not change, the strength is 10 for both, still (and the supply only important for the next turn morale and readiness, so does not play in the current fight.) But the defender has +2 db (terrain effect, like defensive stuff, probably a city, maybe over a river), so effectively it is a 3 vs 5 fight, not a good one, should result a 2:1, but the defender also has 3 entrenchment, that also shifts it for less damage to them, making it a 2:0
The iron cross is experience, each full cross (or whatever for other nations) means an effective +0.5 power in combat stat, which can be quite powerful, also adds option for overstrength, and since that directly change combat results, also quite powerful, but costly and takes time.
In most case, attacking entrenched units is a bad idea, but sometimes you need to do this. Attacking with 3 entrenchment is a really bad idea, unless you can follow it up with 3-4 other attacks, so in the end you take the hex and kill the unit, making the entire combat worthwhile.