How can I disable or password protect my device's 'factory reset' function? Is there any way to prevent a factory reset, like password protection? I would basically like to protect my phone from resetting if it gets stolen.
Not possible on any stock recoveries that I have seen.  A custom recovery would be needed for something like this, although there would be nothing preventing someone from flashing a different Recovery that doesn't have password protection.

Honestly though, factory resetting your device is probably the best thing a thief can do, since this wipes your personal data (at least the portion that's stored on the phone's internal memory.)