Is there any way in Wolfram language to step through the code as it is executing line by line?

WL doesn't execute "line by line", so I don't think you can get exactly what you're looking for. However, look at http://reference.wolfram.com/language/guide/TuningAndDebugging.html and you'll probably find something helpful. Maybe TraceDialog?

is there an easy and quick way to jump to the document or part of the document where Foo is defined

There are two different interpretations here. First, if you're asking for a way to jump to the specific cell or text where the user input the code that "defined" Foo, then the only way I know is just regular search (Edit -> Find in the menus). But that user-input code is not the definition of Foo. The definition of Foo is what results from executing the user's code, and you find that result in the DownValues, OwnValues, UpValues, and SubValues for the symbol Foo. So, the second answer is to just evaluate DownValues[Foo] (or whichever definition you want). Or you can get summary with Information["Foo"].

Let me be a bit more specific with what I'm trying to do.

let's say that there's a function being called, let's call it MyFunction. so there will be something like

MyFunction[argument0, argument1, argument2]

Let's say that I want to figure out what's going to happen when this is executed.

Somewhere else in the codebase, which is comprised of hundreds of documents in an extremely complicated tree-like structure, there must be something like:

MyFunction[a_, b_, c_] := <some stuff>

How can I reliably get here, to see what is going to happen? Using search for the string MyFunction is not particularly useful, because in the codebase, MyFunction will be called up to hundreds or thousands of times, so it will take an extremely long time to find the right match of the string.

in other IDEs in other languages I've used, there is a feature where, if I want to do this, there's a command (such as clicking the middle mouse button on the function name), it will open the document that contains this, and focus on the relevant line. Is there any good way to do something similar here?

Thanks, this does help somewhat! it does let me see what's inside these functions. It would be nice to have a navigation feature, as, in figuring out this codebase, the downvalues go multiple levels deep and often contain essentially very verbose tables of data, so it would be nice to be able to find it where it was originally written. I will look into if there's a way to do this in my IDE.