While exercise will help control blood sugar, the foods you eat will help the most. You should be eating a very low glycemic diet - those foods which don't spike the blood sugar - you can do a search for that list of foods, but it mainly consists of vegetables, meats, whole grains.
Fruit should be limited to one serving/day due to the sugar content (even though it's "natural" sugar) and it should be paired with a protein or a whole grain, which will help slow the absorption of the sugar.
I don't know your current weight, but perhaps 1200 calories isn't enough for you, particularly, with the exercise you're doing. If you don't eat enough calories/day, your metabolism will actually slow down in an effort to preserve body fat you already have to make up for what's not coming in.
I'd also have to wonder if you've had your thyroid tested to be sure you don't have hypothyroidism. Hypothyroidism is a very common cause of not being able to lose weight - even is levels are "in range", but at/near the bottom of the range, you could need to be started on thyroid replacement medication. Your thyroid controls your metabolism and without adequate thyroid hormones, losing weight can be very difficult to impossible. Ask your doctor to test Free T3, Free T4 and TSH - don't settle for just TSH, which is what most doctor consider the "gold standard" in thyroid testing.
I too am 62 and take insulin. I am a type 1 diabetic. The fact that you are losing weight is great! It might be frustrating not to loose more but to lose any when you are taking insulin is good. There are new medications that can help. Ask your indro about similyn or any others that might help.
check out OPTIFAST , i also am hypothyroid