There are 6 Equipment slots available. I have listed them as three pairs. The items in a pair uses the same set of crafting materials to make, and their powers are reciprocal.

Weapon - Provides a chance for basic attacks to do double damage (Critical Hit)

Armor - Reduces the critical hit chance of your enemy's weapon

Helmet - Decreases the dodge chance of enemy creatures.

Boots - Increases all your creatures' dodge.

Belt - Increases the damage from all your creature 'skills' - like poison damage for example.

Gloves - Reduces the damage from enemy creature 'skills' - like poison damage for example. 

Before we go into crafting, it is very important to understand which equipment are most important and which all are not useful. This greatly influences the crafting choices you make.

Belt is the most important end game equipment in my opinion. It might affect the damage output of only a few of your creatures, but when it does, it does big. Say, a Taurus that would otherwise hit for 5000 damage will hit for 7000 with a +40% belt bonus. This decides whether you encounter 4 wounded angry creatures next round along with an enemy hero with full rage bar, of if the board is cleared of the enemy creatures.

The impact of gloves is even more. That is because a 100 damage reducing to 60 is a bigger change than hundred increasing to 140. However, except in player-vs-player situations, you know what kind of deck you are going to face and you can plan accordingly. For example, you don't need gloves against a deck full of magic dealers, you just need a Mithrill Drone ;)

Boots are good to have. Even at 15% dodge, all your creatures getting 15% dodge makes an impact. However basic attacks become less consequential as you progress, and some hero talents like 'Group Tactics' (100% dodge to all your creatures) makes boots redundant.

Helmet enables you to hit even creatures with 100% dodge, and consistently hit creatures with low levels of dodge.

Level 5 orange helmet and boots are good to have. 

Weapon is somewhat useless. Armor is utterly useless. These slots are better used for blue Noble Lord or purple Planeswalker equipments with special skills (using sparks).

You can get common Orange materials in two ways. One is to keep producing green through smelting and upgrade them to gold.

The other is using the following formula (I first saw it put in forum by a player called Japoon)

1 white + 1 white = level 1 white equipment
This process has two advantages. One is that it takes only 3 purples and 3 whites to get an orange material, instead of 4 purples. That is about 25% more profitable.

The second is that, you can use this technique to convert between different kinds of materials. For example, you can use two purple materials and a level 1 purple sword to craft a level 1 gold belt, and then dismantle it to get gold material for belt. Similarly you can also use a gold level 1 sword to craft any other level 1 gold equipment, using only white materials for the latter.

A level 1 equipment needs only two materials to make, and an optional equipment.Level 3 and level 5 equipment require 4 materials and a lower level equipment as fodder.

It should be noted that only the tier-1 materials (the ones that you use to craft level 1 equipment) can be converted between different types. The two extra materials required for level 5 needs to be smelted.

Since your final goal is the level 5 gold equipment, we shall start from there.

To craft a level 5 gold equipment, you need 4 gold materials and a level 3 gold equipment. This gives you a 42% chance for success. That is the maximum chance of success you can get for level 5 gold equipment.

To craft the required level 3 gold equipment, use 2 oranges and 2 purples. Preferably use the lower level orange materials (the ones used for crafting level 1 equipment) to craft your level 3. These are easier to get as you can convert these from other tier-1 materials.

Four of failed purple equipment can be upgraded into a level 5 gold item with lowest possible stats. (for example, you can use one purple level 5 sword and 3 purple level 5 gloves into a gold level 5 sword or glove, more or less like how you upgrade materials) Level 5 gold Planeswalker require level 5 gold normal equipment, so I would recommend keeping these purples for some later day.

You need 100 sparks to craft a blue equipment with a special skill, 250 sparks for a skill on a purple equipment, and 1000 sparks to put skill on an orange equipment.

The 'common' skills are muddle, harrow, unholy rites and law.These can be gained from any equipment of blue level and above. Better skills like confine, blitz and salvage are available on purple and above.

Blue 'Noble Lord' equipment has the possibility of a very good skill called 'Bladeshard'. I would recommend to spend sparks only on blue noble lord equipment until you get bladeshard.

Once you have bladeshard, you can go for other skills with 100 sparks or a chance for better skills on purple and above. 

To craft blue Noble Lord equipment, you need to craft a level 5 Lord Equipment and use it as fodder for the Level 5 Noble Lord. (Note: Lord and Noble Lord equipment are always of level 5). See a typical recipe below (sorry for the low clarity pictures, I don't have better ones right now)