Hit points represent how much damage you can withstand before you start accruing wounds.
There are a number of ways you can fictionalize hit points. The classic way is how much hurt you can take, like black eyes and stab wounds, before things get really bad. Another way to think about them is that they're a measure of your endurance: how much combat action you can suffer through before you get sloppy and that one attack lands just right, doing you in. The long and short of it is that it doesn't really matter how you fictionalize hit points—in fact, it's more fun in the game if you play it by ear.
Starting Hit Points
You start with a maximum number of hit points equal to your Mighty + 1, and after level 1, your total hit points are always equal to your Mighty + 1. So if you improved your Mighty from 6 to 7 at level 2, then you have a total of 8 hit points (7 Mighty + 1 to start).
You can never recover more hit points than your total (unless a spell or ability says otherwise).
You recover HP with a full night’s rest. If you’re not engaging in strenuous activity and have attended to whatever harm has befallen you, you recover 1 HP. If you have the Survival skill or any other skill that may help with recovery, you may recover 2 HP instead.
It is possible to regain HP by way of magical recovery, such as from spells, magic items, or other abilities.
Magical recovery restores HP instantly, but does not repair armor points (AP). Magical recovery also negates the status effects caused by minor perils. For example, suppose you took damage from a Necrotic maleficence, but your HP were unaffected because you're wearing armor. Magical recovery would immediately negate the necrotic status effect that paralyzes limbs, even if it does not recover any HP because you're already at full HP.
When you reach 0 hit points, you don't go unconscious: you gain the vulnerable status. This means you're out of juice or on your last leg, as far as the fighting goes. Take any further damage and you accrue wounds, which can put you on death's door. See the rules for Wounds to understand how that works.
No single source of damage can reduce you to less than 0 hit points if you have at least 1 hit point. So for example, if you have 2 hit points left and a source of damage deals 5, you're at 0 now and vulnerable. The next source of damage will deal wounds.