From both definitions, it seems to me sensationalism is taking something foundationally true and making it more sensational, even if it means lying or obscuring truth. A sensationalist headline is a headline for a story that is true, just exaggerated or misrepresented somehow. Same thing for the paper boy on the corner.
I didn't read the comments, but from the discussion, making up an assassination attempt out of thin air is way more than "sensationalizing".