Is it necessary to flatter people?

This one is a no-brainer. Yes, it's necessary to flatter people.

This essay prompt is a variation of another common SAT essay theme: is lying ever justified?

The "context hint" already gives you examples of when it is necessary to compliment people, so be sure to give examples that go beyond what is given in the context hint. Remember, the main difference between a 5-essay and a 6-essay is that a 6-essay gets into the "deep idea," whereas the 5-essay does not. Yes, I'll explain more about what I call the deep idea later.

One of the deep ideas that you could offer could be what distinguishes a situation in which flattery would be important from one in which flattery might not be warranted. For example, imagine a friend of yours has to give a presentation, and you know he worries about how he looks. You know that he won't be judged on his appearance, but you know he could gain a confidence boost from thinking he looks good. So in this case, you could tell your friend that he looks good. You could argue that in this case, no (or not much) harm comes from flattering your friend to give him the confidence boost that he needs.

Or another example--perhaps it's only minutes before senior prom (or whatever you call it where you live), and you know your friend has spent hundreds of dollars on his tuxedo. At this point giving your honest criticism that his colors clash would not help much and could in fact ruin a once-in-a-lifetime event. You therefore tell him that his purple cummerbund looks great with his brown shirt, knowing that he'll be more likely to dance if he feels confident. And of course, if he dances, you know he'll have a good time.

If you want to go against the grain, you could argue that flattery, praise, or compliments are never necessary simply because the world would be a better place without dishonesty. Writing such an essay would take a bit more work, but it could be interesting if you defended your stance. Again, if you defend yourself well (and did so not just to be different), it could work.