Targets can be debuffed to negative resistance values (the hard cap is -100%). E.g., at -50% resistance the damage will be 1.5x; at -100% the damage will be 2x, this means that to achieve a full resistance debuff, using just this spell, requires 400 spellpower minimum, something that is likely unachievable even in Awakening, making Vulnerability Hex (which merely requires 234 minimum spellpower) a better option for quickly reaching the hard cap.
The description is misleading, the hex is not contagious. The spell creates an aura on the target that applies the debuff within the 10m radius. This aura disappears when the target dies.
Currently active Damage over Time effects from spells like Walking Bomb or Crushing Prison are not affected, the Hex should be cast before.
There are two spell resistance checks against Affliction Hex. One is with debuff on direct target and another is with "contagious" effect. It is possible that despite the hex shown, the direct target still receives normal elemental damage.