I think you live in another Ottawa from the one I've lived in for so many decades. And I don't know what kind of 'crown projects' you've been involved in, but I worked as a public servant for a lot of years, and still have a lot of friends there, one of whom is a senior director and another who works in the office of an assistant deputy minister. Your view of how the government and public service interact is straight from a manual. But it ignores human reality. The primary motivation of almost all senior management is to curry favour and please the next two levels above them. And they will do damn near anything to do that.
If someone displeases the PMO, never mind the PM, their career is dead. Even at the deputy minister rank. You can find yourself moved to some crappy little department nobody wants anything to do with and left to rust. So you can be sure if the PMO makes its wishes known, they're carried out.
Yes, indeed, the NCC directors are appointed by the governor in council, which essentially means cabinet. If you think the process is non-partisan you probably think the process to appoint senators is non-partisan too.
Public servants make policies all the time, and develop processes for carrying out a wide variety of organizational objectives. They also make rules too.