An enhancement bonus is a bonus that represents an increase in the sturdiness and/or effectiveness of armor or natural armor, the effectiveness of a weapon, or a general bonus to an ability score.
Multiple enhancement bonuses on the same object (in the case of armor and weapons), creature (in the case of natural armor), or ability score do not stack - only the highest enhancement bonus applies. This can be problematic in the case of weapons with an "attack bonus", because if you enchant them with an "enhancement bonus" it will count as a separate item property and the bonuses still will not stack. Consider, then, the attack bonus of a Composite Longbow +3, which would read in-game as follows:
Composite Longbow +3
- Attack bonus +3
- Mighty +5
If this weapon is enchanted with an enhancement bonus of +5 it will, after enchantment, display as:
Composite Longbow +3
- Attack bonus +3
- Enhancement bonus +5
- Mighty +5
The higher enhancement bonus will not stack with the attack bonus for the purposes of its "to-hit" quality, and will instead overlap. Therefore, after the +5 enhancement bonus is applied, the attack bonus is effectively wasted as an enchantment slot. Further, if the PC using this composite longbow has a strength higher than 20, the character's info tab will show their current strength damage bonus, but only +5 of the strength damage bonus will be applied in combat.
Finally, since enhancement bonuses to armor or natural armor effectively increase the armor or natural armor's bonus to AC, they do not apply against touch attacks.