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The Death Gaze can be dispelled with a dispel Magic spell. Just make sure 2 of you chars have several of them memorized. You will see a small symbol on the char portraits if one is affected by deathgaze.
As for the hold spell, the demon casts, I found that if you run in front of the Demon with a few chars during he casts his first hold spell, he sometimes holds itself (maybe sometimes he just passes his saving throw)
I didn't try to take out the cult members by stealth before the fight by now, but maybe I should try it next time. My biggest problem was always that it took quite a while to kill the cultists and the demon, although I kept him busy with summoned creatures, always deathgazes my party (thus I have to cast dispel magic during the fight, which takes additional time).
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