The addition of a cam will not increase STATIC compression but the earlier intake close of the 21 cam will increase CORRECTED compression and COLD CRANKING PRESSURE (CCP) which will result in increased torque.
The upgrade to the hydraulic tensioner/roller chain/hi volume oil pump is a money well spent; good investment. You didn't mention which kit but if not the SE Hybrid kit, you will need a set of conversion cams to complete the upgrade. You should also upgrade the inner cam bearings in the process.
The 21 cams are more suitable for a heavier touring model. You might consider the 26 cams for the lighter Deuce. JMHO.
No worries about engine life; you will get a little TQ/HP boost with no effect on engine life.
Yes, you can do the job yourself. You will need the service manual for your bike, basic hand tools, a couple of specialty tools or the common work arounds and you will need to decide if you want to retain the OEM pushrods or replace them with adjustable pushrods. Pushrod selection will determine the R/R process.
I assume you have already upgraded the intake and exhaust to Stage I? If not you should as part of the upgrade. You should also consider including a tuner, such as the Dobeck TFI to add fuel which the upgrade will require to perform properly.