Could a severed nerve cause long term damage?

Yes: It will take a long time for nerves to regenerate. If the nerves are not surgically re-connected, it becomes really hard for full function to return. Even with surgery there is good evidence you may not get full recovery.

Severed Nerves: Will die if not attached or brought close together. Untreated, there will be long term damage.

Nerve: It really depends on which nerve was severed - a major nerve can clearly cause long term problems, a smaller and not so significant nerve injury not so much a problem.