1. You can't eliminate politics. As a project manager the best thing that you can do is navigate through politics. The best thing that you can do is to find a common ground for all your stakeholders. It is not your job to eliminate politics in gate review meetings (or anywhere else, for that matter), and you don't have authority to do that anyway.
2. A terminated project is a failed project. No matter how you see it and how you try to twist it, a terminated project means failure. Failure in project management, failure at the executive level, failure in the medium/long term vision, technological failure, etc... They all mean failure.
3. The project should never have a conflict with the project sponsor. The project sponsor is the spine of the project and the project can't live without it. The project manager should resolve any conflict he has with the project sponsor immediately (at his own expense if needed).