AFAIK
The offset is the measurement from the hub to the outer edge of the wheel, therefore a higher offset will make the wheels sit too far in the arches and may catch the brake calipers and a smaller offset will maket the wheels stick out of the arches...
Wheel spacers go between the hub and the wheels to make a higher offset wheel sit further out [i.e bring the offset down] maybe to clear the brakes or something...
Hope This Helps You