That's a tough dilemma - and not one that has an easy or straightforward answer. For most breeds 12 is relatively old but not decrepit, flying however is stressful and scary for them and for some breeds that have pug-style noses it can carry significant risk of them experiencing respiratory distress. A thorough check from a vet who knows of the intended plan is crucial and will give you the best information possible about the dangers and risks for your particular cat.
In more general terms..
The airline used can make a big difference - some will allow them to be carried in the main passenger cabin which I believe makes is much less stressful and safer for them as the temperature and pressure are much more stable compared with the hold. If you can find an airline that will carry her in the passenger cabin this is probably the single biggest thing you can do to make it easier on her.
If she doesn't die, will her life be shortened by much from the stress?
The stress of the whole experience would be my biggest concern. While unlikely to kill her outright (unless she has heart problems) prolonged periods of stress can cause knock-on health effects such as over-grooming or cystitis. Assuming she avoids all that then the stress shouldn't have any lasting impact on long term health.
What is the chance her ears will be permanently damaged from the altitude of the flight?
Pretty low, unless there are already issues in that area she's unlikely to receive any permanent damage to her ears from the pressure changes - it's entirely possible that they experience a similar "popping" sensation to humans but since they can't communicate that it's hard to know for sure.
What is the likelihood of our cat dying?
It's impossible to know for sure, however based on some figures I found for US air travel ~2 million animals fly on commercial flights each year and in 2012 a total of 29 pets died, 26 were injured and one was lost, so while the number that died isn't great when you put it into context of the total number that travel it's only 0.001% which is much more reassuring.