However, properly prepared, cloth can give protection as well. An armor worn by the Spanish during the conquest of Mexico was Aztec quilted cotton armor. In most cases, these common foot soldiers were not wealthy enough to afford European plate steel breast plates and so made do with what was locally available. Aztec quilted armor, Ichcahuīpīlli, was made of multiple layers of cotton toughed by soaking in salt water brine. It was reportedly able to resist the blows of the Mācuahuitl, the Aztec obsidian/flint-edged sword clubs.
http://en.wikipedia.org/wiki/Aztec_warfare#Armor
Without a doubt. I've read about layered cloth armor and shields too. Similar in principle to modern Kevlar armor.