It deals absurdly high damage. I play sorceress and I cannot find an easy way to kill more than 2 unravelers. Is there a way to protect yourself from this spell's damage?
The Unholy Bolt is much like the Paladin's Holy Bolt, but the living/undead part is reversed. It does untyped magic damage, meaning that elemental resistances don't help.
To reduce the damage, you would need magic resistance, or reduce magic damage.
This will be a percentage reduction. The Arreat Summit has a page about resistances. It says
Magic Resistance: Even though it does not appear on the Character Screen, each character has a Magic Resistance. The base is 0 for Normal, Nightmare, and Hell difficulties. The only item that can adjust this Resistance is a Crafted Safety Shield with +5 - 10% Magic Resistance. No skill or item can lower Magic Resistance. The Runeword Oath can also modify the amount of damage taken through absorption. Read below for detailed information on absorption.
Magic Damage Reduced
There are plenty of items that reduce magic damage by a specific number, like Magic Damage Reduced by 7. These usually aren't strong enough to be very practical in later difficulties, but it certainly doesn't hurt.
Whether you can resist their damage or not, you should try to kill Unravelers first. Not only do they do significant damage, but they heal other undead and resurrect them as well.
Ignore the minions, and focus fire on the Unraveler. If there are too many in one room, back out and try to lure one out.
The bolts themselves don't move that fast, so if you can pay attention you can get out of the way. This is easier if you have invested in Teleport so that you can do it in the middle of a fight without draining all your mana. This is also easier if you can see clearly, so don't let the minions get too close to you and keep your range.
As a sorceress, you can use Energy Shield to take damage to your mana instead of health. I don't usually put extra points in this until later in my build, like when I get to Hell, if I put any extra in at all. But, you should definitely put a point in it, and use it most or all of the time.
Play in a Party
As fun as D2 is solo, it's orders of magnitude better in a group. Bring a tankier character along with you, and stand behind them. A shout barb will increase your survivability, a stun bear will keep the unravelers on lock, and so on.
A necromancer with corpse explosion makes these mobs cake. Kill a minion, have the necro CE it, and watch the dominoes fall. As a bonus, Unravelers can't raise a corpse if it's been exploded.