I have a specific strategy for dealing with His Infallible Meddlesomeness, the Pope, which I call the "Pope on a Rope" strategy:

In my Genoese (XL) campaign, I'm keeping the pope as a tame poodle. Destroyed his faction once, waited for the re-emergence in Rome and Papal States, defended Rome (and kept it) and abandonned Papal states, which I had stripped of everything but the fort and 20% farmland (I have a "rule" to never destroy farmland, and leaving the fort was part of the cunning plan....). Second year after the re-emergence I attacked Papal States once more, ensuring the Pope survived with so few men they could fit into the fort. Kept him under siege til he had approx 200 men left, then abandonned the province. This gave me an auto ceasefire, and the Pope was left with a useless army that cost more in upkeep than his territory could supply in income. He can never build ANYTHING else ever again Not even a border fort, which means I can afford to leave a Grand Inquisitor and Assassin (now up to 6*) and spy on permanent duty in the Papal States. Any trouble with excommunication, well, I go off and do my Catholic bashing for a while and when it's convenient I knock off the Pope with my 6* killer and get re-commed and carry on Crusading as if nothing had happened.

You can't keep the Pope out, but you can keep him down
In this particular campaign it worked out perfectly, and the Pope was the least trouble ever. Since then I've always tried to do this whenever I play a Catholic faction and my empire reaches that part of the world. Another aspect I didn't mention before was that the high-valour spy also keeps the loyalty in his province low, so there's no way he can afford to send ANY troops out on the attack, either.