Jumping 2 feet wont hurt her. Gymnastics associated with jumping and caveletti would help her a lot. Twelve is not old and certainly not old for jumping or any other venture. Most horses hit their prime about that age (high competition horses in Dressage may be older).
Dressage helps every horse (English or Western discipline) because dressage is simply the French word for training. Either way and no matter what you do, you want a horse who is balanced. This means working with weight on the hind quarters and a light front. Some horses find this difficult.
In your horse's case you need to get her "ring" working. This is the ring of muscles that allows her to be elastic. Getting her abdominal muscles as strong as you can so they can support her back is what you are working for.
Check these out: Revitalizing the Effects of Down and Out
And this: http://www.equinestudies.org/ring_re...s_2008_pdf.pdf