お世辞 is based on lies and not facts. A person who always tell you facts is a honest person but I wonder if he can live well with others. Whether it's wrong or not, I think お世辞 is just a kind of social lubricant.

This word お世辞 common meaning is flattery. あなたはお世辞ばかり言う　(You always say flattery only) Therefore when speak out This word it is not good. but for example like 彼女の　言った事は　お世辞だと思うけど　嬉しいな　(　her saying should be compliment but I feel happy) . If this way which like you think about the others words. It change meaning good. In Japanese customs use good comment to others which is お世辞　Even if the person stand opposed side.So that お世辞 itself is untrue. But case by case it is true or not true should be judge yourself.

I agree with isomura-san. As for a Japanese word for compliment, I think of 褒め言葉, 褒める, 称賛 or 称える. The latter two sound formal. :)