Here is my explanation about basic audio with some tips.
EQ is typically used as a corrective tool especially in the recording industry to help other instruments sit in the mix. If a Bass guitar is using to much energy in the low frequency range, it can muddy the mix so rolling off some lows will clear it up rather than just reducing it's level. Same for the high frequency range. Other times EQ can be used for an effect or to purposely enhance a certain range.
By definition, EQ alters natural sound. This is where people make mistakes or go to far with it because they have all kinds of sliders and knobs to play with, they feel compelled to use them all.
Compression is a tool to control the dynamic range of a audio signal. In radio this will flatten out your audio peaks so your audio level is consistent depending on the compression setting giving it consistent drive and punch. Too much compression and your audio will sound rather squashed and terrible and every breath you take will be loud and audible which I hate hearing . A little compression goes a long way. Best way IMHO is to set the processor level to where you see peaks up to 5 db but just under 10 db and your ALC meter showing an average scale in the center of the meter with your normal spoken voice.
Proximity effect occurs when you sit to close to the mic. This will drive the audio more but it also gives an increased bass response. The reverse is true and will also pick up more ambient room noise.