I have no idea what it means, can anyone explain to me its purpose and when/if I should rest? thanks :)

'Reset dungeon' message just means you started a run of the dungeon on a previous day and didn't finish it.
Resetting it means it puts you back at the 'start' of the dungeon so you can fight all the enemies and have the chance to do all the puzzles+fight all the bosses for the day and not miss out on one because you already passed them on that previous day

Thank you so much that helps a lot, I'm gonna assume that you get rewards after defeating a boss?

Depends, a mini boss will drop some equipment while defeating the main boss at the end of the dungeon will give you a reward afterwards.

Ok, thank you :)

bosses in dungeons are the only way to get Mythical equips (very low drop chance)

the dungeon of the forsaken (second dungeon, lv60), the final boss is the only place to get Forsaken Guardian ny'vene egglings (also a low chance, requirement to have chance of obtaining: defeat her in a relatively low number of moves) as well as the only place to get the Mythical-rarity Ancient Relics (very low chance, requirement to have chance of obtaining: defeat all bosses in DotF and then Vierna, the final boss, in the same run)

The final reward for dungeons- post-dungeon/dungeon completion rewards, rather than the boss rewards- is usually not that exciting. A few thousand gold, or a small number of healing potions, or a piece of mediocre equipment, sometimes a random eggling (regular species, rare rarity (maybe they can be higher?)) If you're lucky you could get an essence, though.