It is always ethereal and thats good thing (way more defense).
But this armor by no means is needed, I for example used breast plate TU for my run, lower defense but lot of attack speed, 50 all stats, very useful early on when you are stat starved. There is more good TU chests, full plate too, , you really can't go wrong.
Kra rw is Kra runeword (dragonheart).
You want to make it in highest base defense armor for best result, that is ideally sacred Ancient armor (set filter for these to catch). But doesn't have to be, lower base is fine too such as gothic plate, before you find ancient.
First you roll it superior (30ish %enhanced defense), either 6 socket ot 0 (if 0 then you can larzuk quest for 6), any other number of sockets means you reroll again with oil of renewal. Each time you oil of luck it, you wanna hit it on top of nice superior %ed, it can be either more defense (50ish total) or extra 1% phys res, also good. Once you finally have base chest like that, then you put 5 jewels in it and kra rune to make runeword.
Then if your level is high enough (this rw originally requires level 94). If you are 114, you can 5x MO it (+20 level requirement) with 15% enhanced defense, which will add further defense 5x15 = 75% more. So if you have 50% lucky superior +75% from mo, and then armor has property enhanced defense per character level.
Example here, at level 127, its 206% addition defense. And huge total defense as result:
As for jewels, you put 5 jewels before rune to make runeword, for maximum value, and you want as good jewels as possible. Crafting jewels with LEM rune (oil ofc rafting + arcane shard + jewel + lem rune), gives you random rare jewel with extra all stats roll from craft. You want jewels with some of those mods I listed, attack rating, flat life, extra high stats. Attack speed is also very premium especially later.