Hello,
I am so sorry your kitty was injured so badly. A broken tail is a very big deal, and typically causes difficulty when kitty needs to urinate and or defecate. This injury is so painful, and is in such an inconvenient location that kitty cannot posture properly to do her business. Also, your vet is correct, there are alot of nerves in that area, and sometimes full recovery is not possible. Unfortunately, it is impossible to predict your cats chances of recovery, but sometimes amputating the tail is necessary and helpful. Your vet will have to tell you if this is an option for your kitty. Please see the following website for more information on cats with broken tails.
http://www.veterinarypartner.com/Content.plx?P=A&S=0&C=0&A=1322
You can also discuss the possibility of a referral to a veterinary neurologist or veterinary internal medicine specialist with your vet if you are fortunate enough to have access where you live. Please let me know if I can be of further assistance. If this has been helpful, please hit the green accept button. Best of luck with your little one, I hope she feels better soon :)
Emergency Critical Care Nurse
16+ years of veterinary experience