Short answers, pulled from the story.
Silent Hills was cancelled in April 2015 following a breakdown in the relationship between director Hideo Kojima and publisher Konami. Konami removed references to Kojima and Kojima Productions from its marketing materials while Kojima was still finishing Metal Gear Solid V: The Phantom Pain, and on the 27th of April 2015 confirmed to Kotaku that the game "would not be continued."
Silent Hills was to be directed by Hideo Kojima and Guillermo del Toro. Konami's president approached Kojima in September 2012 and asked him to take on the project, and del Toro's involvement was revealed through the P.T. demo in August 2014.
P.T., short for Playable Teaser, was an interactive demo released as a free download on the PlayStation Store on the 12th of August 2014. It was marketed as a horror demo from the fictional 7780s Studio and revealed at its conclusion to be a teaser for Silent Hills. It had been downloaded over a million times by the 1st of September 2014.
Norman Reedus was set to provide both the voice and the physical appearance of the protagonist in Silent Hills, a detail revealed at the end of the P.T. demo in August 2014. He later confirmed the cancellation of the game in a post on Twitter on the 27th of April 2015.
Yes. Horror manga artist Junji Ito was attached to the project, though this was not publicly announced before the cancellation. Guillermo del Toro revealed Ito's involvement in a tweet after the game was cancelled in April 2015.
The Change.org petition calling on Konami to continue the Silent Hills project received 194,279 signatures. The petition was started by fans following the official cancellation announcement in April 2015.