How did this very politicised version of Catholicism come about and should we fight urgently to dis-identify with it in every way?
To answer the first part of your questions, Vatican II.
Whether one thinks it was reality or a media creation, bishops were divided into conservative and progressive camps during the Council. Afterward, influenced by their respective bishops and the media, priests and religious too took divided approaches to the Council (even if both thinking themselves obedient to it) and then so did laity as a result.
Novelty–even if good in substance–is by its very nature divisive–at the very least between past and present. Tradition, received by all from the forebears of all and applying to all, fosters unity. Novelty, which is introduced by some in place of or even alongside the tradition, necessarily causes division from those who came before and those who still adhere to the tradition and wish to maintain such unity. Before Vatican II, there was a common tradition that united all. That tradition also supported authority, another unifying factor.
The conservative-progressive split at Vatican II put that common tradition into doubt and, with it, the unifying authority that used to uphold it. Various novelties spread unchecked. Were they ok? Were they not? Some were, some weren’t, but very few clear answers were given–usually authorities sent mixed signals. All this led to internal progressive-conservative divisions.
The weakening of faith accompanying this division and the increased focus on the here-and-now, social issues, and activism after Vatican II led to a greater focus on politics and political positions, as opposed to dogma, being more vital to ones interests. And in most modern societies, politics is expressed in opposing parties or camps.
As for the second part of your question, yes.