Does terrain modify defense from air attack>?

EZ Dolittle wrote:

When targeting ground units does the terrain they are in affect the defense against air attacks,

Yes it does. The strength increase or decrease affects defensive as well as offensive stats

EZ Dolittle wrote:

Also what about fortifications do they modify air combat?

Units that are within forts at also protected from the air. The fort absorbs a percentage of the attack. So a fort with a strength of 50 means that half of the attack you do will reach the units inside, and half will be absorbed by the fort.