Will using a 32 character key for Blowfish make it a 32 bit encryption? I am sorry if it sounds naive but I have been searching and searching regarding what kind of encryption we end up with if we use a key of length 32 characters? 

This article https://www.embedded.com/design/configurable-systems/4024599/Encrypting-data-with-the-Blowfish-algorithm explains how the algorithm works on the plaintext quite clearly but nowhere do I find the difference a key length will make.

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An example of key is 996b352b-beb9-5628-a61d-4f0fbb72844e
Well, it's a kind of marketing speak.  If you look through the individual entries of this list of block ciphers, you'll see that they are categorised by two distinct parameters.


Block size. This is the number of bits that the cipher operates on at a single time. Blowfish has a 64 bit block.
Key size. Unsurprisingly, this is the length of the key.


These two parameters are somewhat independent, but key length >= block width. Blowfish's key can be up to 56 bytes, and all things being equal, the longer the key the higher the security level. Crypto guys tend to refer to bits though rather than bytes.

With reference to your question, I'd pick the longer number when telling someone about how secure my kit is. Otherwise you have to give out two numbers. You could say Blowfish128 if you want to say anything at all. 



PS. Not sure if this matters to you, but the designer of Blowfish recommends using Twofish instead.

PPS. Further to some comments you've had, be aware that cryptographers would assume that your key consists of independently and uniformly distributed bytes, rather than text characters.  Please do not confuse key with password.  An error of understanding here can have very serious consequences for the security of your system.  Your example key is actually  $\operatorname{log_2}(16) \times 32 = 128 $ bits long. Modern crypto really warrants a minimum block width of 128 bits though to prevent various attacks, but that's a call only you can make.