Actually I m saying "might cause", because when a CPU is operating at the extreme, some longer duration voltage spikes can cause permanent damage to the CPU. Of course, running at that voltage will reduce the CPU lifespan SIGNIFICANTLY.

As I said before in many threads, voltage is the main killer for CPU instead of heat. Well, as process technology gets finer (eg from 90nm to 65nm and etc), the fine interconnecting wires have higher current density. When you pump in more voltage the electron acceleration from 1 point to another will be higher. When the voltage is too high, wear and tear in the wires will be much higher too. Eventually the wires might break and there is no way to fix it back.

Besides, even if the CPU is still working well after some time, the performance will be going down for sure, bcoz it might not be able to work at the frequency once you are running at.

Another fact about silicon is that, using at the predefined voltage and clock speed usually can last 10 years when the CPU is running at room temperature (27C). Every 1C increment will actually decrease the lifespan by some days (I forgot the exact formula to calculate). Since Intel/AMD is giving 3 years warranty, they must make sure that the CPU wont fail or degrade when operating at 50-60C for 3 years.

Hope this may clear your doubts.
Yes. P = IV.
P = Power consumption. In CPU case, the most of the consumed power converts to heat energy.