Definition: "man", or, in these modern times, perhaps "person" (Yiddish developed at times when sexual equality was not the norm, to put it mildly). This is (I think) how it can be used in spoken Yiddish, that is, when you are conversing entirely in Yiddish.
But, in Yinglish, I have never heard it this way. In Yinglish, a "mensch" is a thoroughly decent, wonderful person. A mensch is moral, good, kind and charitable. You need not be smart or wise or even learned to be a mensch.
The Jews have enormous respect for learning, but even greater respect for these qualities. There is even a saying "saloons can't corrupt good men, and synagogues can't reform bad ones".
Pronunciation: Rhymes, more or less, with bench, but the final sound is more sibilant)/
Origin: Mensch is Yiddish.
Why use it? In his wonderful book The Joys of Yiddish Leo Rosten says "Yiddish is like every other language, only more so". Mensch, as used, is a "more so" word. It also has not exact equivalent. A mensch need not be a hero, nor strong, nor smart. It's more than "decent". It's ... mensch.
Examples: "Raoul Wallenberg was a mensch".
"I only hope that my child grows up to be a mensch" or (to a child or possibly a spouse) "Be a mensch!" (which would mean, "do the right thing!".