I've talked about death a few times in the past (both from a character's perspective and from a larger story perspective). Death is an important part of believability when you're talking about genres and mediums that deal largely in combat. The fact that, in most cases, it's a zero-sum game (one dies, one lives) means that the influence of authorial intervention affects how the audience feels about those deaths and what they mean to the setting and story.
Death, in real life, has a certain gravitas about it because people only get one life. When you're dead, that's it. Not only are you, personally, gone, but you aren't influencing the world except as a memory. Your role in the "story" is done. It's why death still has impact in a fictional story, too - because the character is gone, done, and over. Many games reflect this idea by making death scripted only, and even tabletop DMs will often express hesitance to kill a character in a way that's not particularly "meaningful" (no random deaths, only when something like a last stand or heroic final effort can be accomplished).
Yet, as we've established, death is common on a battlefield. Not, perhaps, always instantaneous, but putting yourself in a dangerous situation is going to lead to the potential (however small) for death, and that potential is unacceptable for many storytellers. This creates two different styles: "action" and "survival". The action game, or action story, is heavily about combat, and thus dying is considered a failure of skill, rather than an inevitability. It's a top-down approach: dying is an exception, rather than a rule. Living is the default state, dying is a mistake. A survival game/story, on the other hand, assumes that death is more likely than not, and creates tension through the process of having a protagonist (or protagonists) attempt to escape it.
One important difference between the two groups is that the former is usually voluntary and the latter is usually forced. A survival scenario doesn't make sense if the character could just leave, after all. In contrast, games like D&D are generally about treasure-hunters and adventurers, and thus if it was super-lethal their choice of career wouldn't make as much sense. Almost every game that features combat ends up being lethal, and yet this rarely reflects on the kinds of characters being played. Death exists in games, but no character is really ever truly ready to confront it - rather, it's just sort of there because it's expected to be lethal.
Death and Afterlife
When talking about mortality, and a character's response to it, one thing that certainly needs to be brought to the front is the nature of what happens after death. In real life, it's anyone's game: we don't know, at least not concretely, so different people have different ideas, and those different ideas influence how they live their lives. A person who believes that life simply ends is going to behave differently than someone who believes that they are going to be eternally judged after they die based on how they lived their life.
In many Fantasy or Supernatural settings, however, the presence of the divine (or unearthly, or whatever you'd like to call it) is actually confirmed. Priests and clerics can channel miracles, angels come from on high and demons come from below, etc. It is an objective fact (with visible evidence) that something happens after you die. How does this influence a character? How does a character's understanding of consequences influence their decision-making processes?
Take the concept of Valhalla, for example. An individual who believes in Valhalla is operating under the belief that dying as a warrior reaps eternal rewards. It's not just a cultural value, it's also an investment: die bravely, and you get rewarded. Therefore, their viewpoint towards a combat scenario is going to differ from someone who believes that there is nothing after death. They are not going to worry about death, because they know what happens afterwards (or at least they have an idea). This is going to be stronger if there is substantial evidence for this belief (i.e. Valkyries are a recognized, visible part of the setting).
Understanding the way an afterlife works is an important part of considering a character's morality with regards to death or murder. If necromancy enslaves the souls of the dead, it's different than if it simply animates their corpse. If being killed by a demon ensures that one's soul is trapped in Hell, then suicide (or being killed by a regular human) is a preferable alternative. It makes the difference between a priest delivering last rites during a heated battle being insane or necessary. It makes the difference between an officer executing disloyal men being totally evil or potentially justified. Like any other part of the setting, death and its nature are important.
One of the things that makes pro wrestling what it is is the fact that nobody is gone permanently. In-universe, it's a competition, not a war. Nobody dies, which means that no character is permanently removed. Contestants can win or lose without being "removed", even if they're severely beaten. The worst that generally happens is a contestant might be out of the competition for a few months, and even that is generally a kayfabe excuse for the performer doing something else for a period of time. Championships and titles change hands, but nobody and nothing is beyond recovery.
However, competitions are generally considered to be insufficient for tension when it comes to fiction. Exceptions exist, of course, but the good majority of fiction (whether games, movies, or books) prefers lethal wars to non-lethal competitions. There's plenty of reasons for this, but I personally feel the most prominent reason is that war is more "important" than a competition; things being "to the death" make things more exciting for the players or the audience, because naturally there's more on the line.
Yet, death is rarely captured well in fiction, because it lacks the full context. It's something more akin to "being knocked unconscious, but for a longer period of time"; Dragonball Z's "other dimension" comes to mind to describe it. The lack of impact, both in terms of long-term consequences and in terms of immediate descriptions of death, generally creates an atmosphere where dying is basically the same as getting hit in paintball, or losing all your HP in a video game.
A non-lethal scenario means that this isn't a problem. In a non-lethal scenario, it's not "to the death", and thus it's less serious. This means you can be more theatrical, more show-offish, more flamboyant, whatever. If it's about pride, and not about life, there's a whole world of new opportunities that arises. In addition, a character can exist long-term without being killed upon their first loss. Generally, players and audiences seem to want things to be lethal for the "NPCs", but non-lethal for the PCs. If everything's non-lethal to begin with, it's more fair; the idea of running around killing goblins and bandits but not dying yourself doesn't seem heroic, it just seems silly. Yet, if it's possible for a character to lose without dying, then it opens up new possibilities.
Death is a big deal. It's the biggest deal. It's a really huge deal. It's also rarely treated with the reverence it deserves, simply because of how awkwardly it exists in a story. Death is treated as the natural "oh well, this character lost" result, and its zero-sum nature means that, eventually, it's going to be unfair in favor of the protagonists. Influencing the nature of death - how common it is, how the characters perceive it, and so on - can change the nature of a setting or a piece of work.