At your cat's age this will be difficult. I think having them sit near each other is a pretty big achievement as is
-- many dogs will never tolerate a cat and vice versa. But cats can get far more anxious and upset to the point of making themselves ill by major changes in their home, such as the arrival of a dog. I have a whole thread on working to mix cats and dogs successfully (in the Library) but I kind of doubt your cat will go much further that she has.
In the situation it is wise that your cavalier is cautious as we have at least two dogs on the board who have lost eyes to pet cats swiping at them. So this isn't ever a mixture to take casually -- one or the other party can seriously harm the other.
If Jasper has the freedom out of sight to be weeing on the toilet, he isn't fully housetrained (or has regressed slowly back due to the current situation but it amounts to the same thing now -- he will need to be re-housetrained, most likely). An adult should be able to easily hold themselves til a good opportunity arises to go outside -- easily for 4-5 hours as needed -- and the cat cannot be there all the time, I don;t think? So he should be having no problem holding himself; I think you have some anxiety behaviour on his part here as well, and you really need to nip this or it will get worse over time.
I think you are going to have to start taking him out yourself to do his business, probably on a lead, to an area a good distance away from the cat, or on a walk and just forget about the garden. You will need to start him in on some remedial housetraining too. I recommend getting Shirlee Kalstone's book on housetraining as she goes into managing with an older dog that is slipping backwards.
I'd also start bringing your cat in and putting her in a room for chunks of the day perhaps, so that your cavalier can go out for set times.
You have to keep in mind that she was there first, she has 14 years of set patterns in her life, she is elderly and therefore more easily upset, and then from her POV, this big unwanted surprise was introduced to her (you also get elderly dogs who get very upset at the arrival of another dog). You do need them to live in harmony -- which by all accounts they are doing to a good extent (she could easily have run away for example! Sitting on the same couch even with you there is a major level of acceptance). But you *are* going to have to accommodate both her unhappiness, and his fear, to a certain degree, by the things I noted above. You can't push them more than they have gone, and you can't leave things as they are. Under the circumstances, the burden will fall to you as the human and the owner to make the adjustments -- walking Jasper rather than expecting him to use the garden on his own, for example, for pees and poops -- as long as your old gal remains around.
I would be looking at a couple of other things:
1) getting Feliway plug-ins as needed for your cat -- these cat hormones are extremely calming to a cat and often recommended and sold by vets (also widely available online. They are not cheap though). You can also get the spray and spray the dog bed and even the dog; this will make her think she has marked him as something she likes. You can also take a cloth, wipe it gently on her cheeks to pick up the same hormones, then rub the cloth on Jaspar, his bed etc.
2) If you don't have a cat tree, I'd get one -- buy one with a few platforms and at least one dark box she can go into. Cats get a LOT calmer when they can go vertical and have a bolthole.
3) If you can put in a flap for the dog out some other exit that doesn;t take him past the cat, then do so.
4) If she gets the opportunity to lash out at him, they really need to be better separated. You do NOT want serious harm to come to Jaspar and this could easily happen. If that means you have to physically control each, and place her in one room before he is allowed to enter another, then that is what you will probably have to do. Using babygates would be helpful for limited his access and maybe hers -- depends on whether she can jump it at her age.