Ideally the union wants to deal with the larger entity that controls the studio. Presumably, the studio did not go out of business; rather, it was shut down by its parent company.

One of the benefits to having a labor representative in top-level planning is as a sanity check. Harder to tank your own company if you have feedback loops in place.

Can a union force a company to continue a project if the company decides to cancel it?

Unions are a bargaining tool that can theoretically advocate for anything - it's more useful generally to talk about what they usually do. Generally unions focus on employee rights and will only organize for specific business policies if it is causing obvious harm to the company and employees. I'd only expect a union to force a project to be continued if it was being canceled for silly reasons (internal company politics and similar) but usually simply moving the workforce to another project would be sufficient.

Yes. But it can more reasonably force the company to retain the employees of said project, and move them to other projects instead of firing them.