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Motors rely on air for cooling, so they do care about atmosphere. Propellers rely on air density to "push". I don't know how this plays out in the real world, but atmosphere matters.

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Motors came be 99% efficient, compared to ICE at 20%. Cooling isn't that huge of a deal. If a wing can operate at a given altitude you can design electric propulsion that will also work there. The U2 operated on a turbine at 70,000ft. A turbine is just a very complicated prop at the end of the day so in theory a large cord/diameter prop or a high speed ducted fan would also work. The actual altitudes were're talking about for GA are far lower though. Most GA aircraft top out below 18,000. Electrics will likely prefer operating at 20,000+.

Not sure if the 99% figure is correct, but it is certainly above 80%. Electric motors run quite cold compared to motors that are burning things. Cooling is unlikely to matter.

Now, wouldn't the cold air at higher altitudes present a much bigger problem for the battery? FL20 and up you can easily reach temperatures where current batteries are no longer usable.

90% is the usual assumption.

I imagine the electric "bonus" at higher altitudes would be similar to a turbo prop's bonus. You can get more efficiency at higher altitudes, but it all goes away if you climb further.

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