As a PM with 30+ years of experience and two PM certifications, the three most important principles that I learned are these:
1. It is impossible to keep all of your stakeholders happy, but you must keep them all informed (per the Project Communications Plan -- see PMBOK Guide). [Note: only classified or proprietary information gives sufficient reason for limiting the information provided.]
2. Most "problems" are predictable during a thorough Risk Analysis and the preparation of a Risk Mitigation, Monitoring and Management Plan. Always, always build a prototype (intended to throw away) to gain expertise and reduce risk. Always have a "Plan B" (and sometimes a "Plan C") ready, approved, and funded for immediate implementation.
3. One of my best quotes: "With good people, a better process generally produces a better product."
There are people, processes, and products (they must be distinguished as much as possible). The problem statement mentions "not going well." That is a vague project status. "Difficult to deliver bad news" and "want to avoid" are people problems. If the problem is listed as a risk in the RMMM, then there is already a strategy (e.g., pay overtime for "fast tracking" a task) to overcome it. If not, a trusted and well-respected PM has expertise to create such a strategy -- and to gain buy-in from stakeholders. "Gloss over," misrepresentation, and avoidance are not solution strategies! That's one reason why project success should be celebrated and extra effort/cooperation should be rewarded.