Basically Diamonds appear between 1 and 16 blocks up from the bottom of the world. That's what Y level means. Y=0 equals the layer of unbreakable bedrock at the bottom of the world. Y=12 is twelve blocks above bedrock, on on average about 40~60 blocks down from the surface. Unfortunately there's currently no way to actually see these number in any edition of Minecraft except for the PC version.
Gold pickaxes are statistically the worst pickaxes in the game. It can only mine the same things as a stone pickax (ie not Diamonds, Redstone, Gold, etc) and has the lowest durability, breaking after only 23 uses. They do enchant very well and are faster than iron when mining what they can mine; but this is probably not worth the downsides. Iron picks are always a better choice until you have diamond picks.
The coal-like substance you found is probably bedrock, it is unbreakable in survival mode, and dangerous to break in creative mode (as it creates a whole out of the world, fatal if you fall in.)