Respiratory failure is characterized by inadequate gas exchange, defined as a PaO2 less than 60 mmHg and a PaCO2 greater than 50 mmHg, with various causes including pneumonia and pulmonary embolism. Treatment options focus on correcting hypoxemia and abnormal pH levels, often involving oxygen therapy, bronchodilators, and mechanical ventilation. Diagnostic measures include ABG analysis, chest radiography, and bronchoscopy to identify underlying conditions and monitor respiratory function.