What causes sudden ear pain, and does it mean damage has taken place?

Maybe not. Sudden ear pain is often due to pressure in the middle ear changing the position of the eardrum. For example, rapid descent in an airplane will cause the eardrum to be sucked in towards the middle ear, and causes pain. Infected pus fluid in the middle air space will force the eardrum outwards and cause pain. A doctor needs to examine a painful ear quite soon, in case there is a serious problem.
Many things. Many things can cause ear pain. In children this is most often one of a few things. Teething pain can seem like ears to kids. They may grab at ears when teeth are really the cause. Drainage can irriate the throat near the connection to the ear and cause pain. Lastly swelling and congestion from colds can cause pressure build up (like in a plane) inside the middle ear. These are most likely.