The damage is done, but we can stop further association. Also, we gotta make it our business that "we" don't lose sight of the truths, even though we cannot fix the world out there. You'd know better than me how many in Chabad share your clarity on Zionism. I'm glad I can do this service here on DDF
פלגינן דיבורא:
To your first point, since we say יתמו חטאים (ולא חוטאים) מן הארץ, as long as we are dealing with Jews, we should deal with them in a way that will bring them close to Torah and יראת שמים.
To your second point, I am glad to say that my sons share my clarity, but not because of me hammering anything into them, they rather reached it on their own through their own learning and discovery. I think it would be beneficial if יהדות התורה והמדינה is reprinted and shared with all young (and old) bochurim, so they can get a little more clarity.
THAT BEING SAID. The attitude towards the Israeli soldiers is אשרי חלקם וגדול זכותם that they are actively protecting אחינו בנ"י שבארה"ק through מסירת נפש כפשוטו!