Answers are going to depend on which year Reba you have and which damper is installed in it (Poploc, motion control, black box, something else).
Most poploc dampers are on/off. They're either locked and have no travel or they're fully open. If it has a motion control damper it's not a true lock-out it has adjustable compression damping, increasing the damping will make the fork feel harder on a hit but doesn't stop the travel from working. Black box is kind of a weird mix between the two I don't really get it but there are tuning adjustments for the damping as well as the floodgate which lets you set up a platform like effect that lets the fork feel like it's locked out until it takes a hit greater than the flood threshhold then it opens up.
Sag is good. Having the right amount of sag will set the bike geometry in the correct place and lets the fork extend to keep the wheel in contact with the ground. Typically you set sag by adjusting the pressure, then you set the rebound as fast as is possible without it feeling like a pogo stick, then you set the damping to fit the terrain. Rough chattery stuff gets little if any damping, smoother stuff gets more to help direct more power to the wheels. Might adjust pressure to prevent bottom outs or allow more travel depending on what you're expecting to see but most people find the pressure that give the right sag for them then just adjust the damping as appropriate unless they're bottoming out.