I drafted a reply for this a while ago by my phone ate it, anyway, the abridged version:
An alliance will only help to the extent that you please rather than annoy your ally and to the extent that other factions upset the pope by being mean to his ally (you). Personally I wouldn't ally with the pope just because the mechanic seems a bit unfair if it does work as hoped.
Safe bets to make the pope happy are (1) give him money; (2) build churches and upgrade them; (3) recruit priests and convert heathens. If you have a high heresy rate I think that counts against you. If you keep your papal favour highish then you'll withstand his wrath a bit better and your enemies will suffer it a bit more.
If it gets too low then assassinate him / enemy cardinals and get your own pope elected - no guarantees in the long run but it boosts your rating briefly.
Failing a 'cease hostilities' mission by sallying sounds strange - unless that's what got you the mission. As far as I knew, it depends on whose land you're on and not who the attacker is once the mission is running. You should be able to attack on your own land without failing and being attacked on the enemy's land will cause you to fail. If in doubt, make sure you attack with artillery and take several targets on one go - then stop if told to (and recruit a priest or two, give some cash from your victory to the pope if needed etc).