In the movie they say that once the cup crosses the seal it is basically all destroyed and broken. Meaning no eternal life. He was able to heal his father before the lady crossesElsa crossed it with the cup(sorry cant recall the name).
When the cup was taken and then crossed over the seal, whichit basically made the temple self destruct-destruct as the dramatic scene of the knight waving goodbye plays out and that's when the 'invincibility spell' was broken.
So yes, Indiana Jone'sJones' father did die and no, he was not immortal.
Also the reason why the knight was there was to protect the grailGrail not necessarily to live forever...because Because who would want to sit in a dark musty old grave for the rest of their life? (also in the movie they state that one knight still lives to protect the grailGrail)