increase the ADC resolution using oversampling
What is the lowest and higher low bit


Here is your typical binary number:

1001101001
^... ^ ^ ^
|    | | |______ Lowest bit
|    | |________ A "higher" low bit than the lowest bit
|    |__________ A higher bit than the two above
|________________ The highest bit



  Why the lowest low bit usually most noisy than the rest of the bits


Let's take a look at say.. 3 bit number:

Decimal   Binary
      0   000
      1   001
      2   010
      3   011
      4   100
      5   101
      6   110
      7   111


Note that if we have a continuous transition between numbers A and B the lowest bit will have the most changes from 0 to 1 and vise versa. And the noise is nothing but a bunch of random (or not) continuous transitions from As to Bs.


  So why can't we just use oversampling and gain 14-bit resolution
  instead of 12-bit resolution with decimation?
  
  Is that to reduce the noise after the oversampling stage?


Yes. The "noisy" bits don't provide any useful information (given they are just uniformly random).