Aggression is a character's inclination to attack. Simply put, NPCs with higher aggression are more likely to attack the player and other NPCs, while those low aggression may only fight back if attacked, or not at all. It can be modified temporarily by frenzy and calm spells, and permanently by quest scripts and the Construction Set. It is an AI-exclusive trait and is invisible in-game.
Aggression is much more straightforward than Confidence. Simply put, if a character's disposition toward another character (including the player), drops by more than five below their aggression rating, they will attack that character on sight. An aggression score of 0 therefore means the character will never attack anyone for any reason, even if their disposition toward a character drops into the negatives (which is possible, but not visible in the persuasion minigame). Conversely, a character with a score of 100 or higher will attack anyone they see, regardless of provocation, unless their disposition toward that character is 100. Those with aggression level 5 (the most common) or less will not attack unless provoked.
If a character's disposition towards an attacker is high enough to not fight back, but they don't flee (determined by a complex equation that encompasses that character's confidence), they will just stand there and take the beating. However, if that character's responsibility is high enough, they will report the assault.