Hi Jemstone,
You can find the data file folder by loading the game system in Hero Lab, then going to the Tools menu -> Explore Folders submenu -> Game System folder. Unfortunately we don't have an application that lets you edit the definition.def file - you'll need to edit it in a text editor.
You can find more information on data file authoring here:
http://hlkitwiki.wolflair.com/
Hope this helps!