The human body needs protection in low-pressure environments (e.g the vacuum of space or Mars’ low atmospheric pressure). Without protection, gasses in the body expand and liquids sublimate away, basically making the normal function of bodily systems impossible.
Gas partial pressures and operating pressures of suits and habitats are huge topics that I am not getting into here right now. What I want to mention is something that is a little surprising: skin itself is gas-tight and does not need as much protection as one would guess. All that is required is mechanical compression in order for it to maintain its normal shape and function.
The idea of mechanical counter-pressure (MCP) spacesuits originated in the ’60’s. But only recently have materials evolved to make such a suit practical. Maybe. Research is ongoing.
Here’s a fun paper that analyzes the radiation exposure of characters in The Martian. The TL;DR is that Mark Watney would have fared better than his crewmates in the Hermes.
Mars, with its thin atmosphere and lack of magnetosphere, doesn’t offer as much protection as Earth, but it’s better than nothing.
“We will have to live in domed cities and wearing spacesuits on Mars for a long time. But that’s not to say that we can’t have a really nice life. But it’s not gonna be an Earth life. It’s gonna be a Mars life.”
-John Grunsfeld, Associate Administator, former Astronaut, NASA
(From Nat Geo digital short “Finding Shelter on Mars”, http://channel.nationalgeographic.com/u/kcHFdMpA6aOk1uf9U–PNfETnzRnlxuRaqE-NlgZ_SbDUwaV2DA9Q8pdgmwf/)
Solar and cosmic radiation will keep us underground unless we come up with other ways to protect ourselves. Water, in liquid or solid form, is a good insulator from this radiation. But how to deploy it in a structure? Here are a couple of variations on the idea of an ice dome:
photo from Mars Ice House