A 2D axisymmetric transient coupled plasma-thermal model is developed to simulate the plasma behavior during the self-sustained discharge of hollow cathodes, which presents a complete hollow cathode structure and energy transfer processes in multiphysics fields. The model has been validated by quantitative agreement between the simulation results and experimental data on the plasma and emitter temperature at the NSTAR cathode. The effects of thermal protection design, operating conditions, and geometric design on the cathode performance are analysed through electric and thermal power decomposition. The parametric analysis shows that the optimal thermal protection design is to use a 1/3 thickness cathode tube with 4 layers of radiation shielding close to the tube, which reduces 43.7% conductive and 61.1% radiative heat dissipation, respectively. Increasing the inlet flow rate counter-intuitively reduces the emitter temperature due to the potential reversal in the diffusion electric field dominated region, revealing that the flow rate can be traded for the dual optimisation of lifetime and power consumption. Under high current conditions, the IAT effect dominates the plume resistance to increase the discharge voltage after an inflexion point, which is the main factor limiting the cathode performance. A large internal radius gives a uniform low emission and helps to prolong life, while the orifice length should be avoided to be longer than 4 times the orifice radius due to the significantly enhanced Joule heating in the narrow orifice. The orifice radius determines the power deposition due to electron and ion bombardment through potential penetration. For high-current discharger cathodes dominated by electron bombardment, large or through-orifice designs are preferred, while for low-current neutralizer cathodes dominated by electron bombardment, small-orifice designs are recommended.