I'm new to this too, but 1.2 is the aperture size ... it's the max aperture that you can open up to with that lens. I'm hoping I stated that correctly, if not someone here will chime in and correct me and probably explain a little more in depth.
However you can get the blur effect with the lens you have. I have the same camera and lens and have gotten that effect. You have to adjust your aperture size (the f number) to a large number. It's called shallow depth of field. That will keep your subject in focus and blur the background. You may want to experiment with the aperture priority mode on the camera and try it. It's the A mode on the top dial. Here's a photo I took of my son with that effect.
My aperture was set at f/5.6 for this one. With that lens, you'll notice in the description it says 3.5 - 5.6. That means the max aperture is different depending on your focal length. If you are shooting something at 18mm, you can open up all the way to 3.5 and it decreases from there ... at 55mm you can only open up to 5.6.
Here's a link to an article that explains aperture a little more. It's a really good site for learning, it's helped me quite a bit.
Introduction to Aperture in Digital Photography