As an example of the relative importance of different parts of your job, your time could be split roughly 60% in "management by walking around," 25% on specific project management tasks (creating and maintaining project documentation, attending and leading meetings, etc.), and 15% proactively communicating with stakeholders and the project sponsor.
To avoid being seen as a bureaucratic fixture on the project, you need to work with the team members one-to-one to get an understanding of the progress of the project and where you can help them address risks and issues. This "management by walking around" is the most effective way to get an in-depth understanding of the situation—what's really going on, what people are wrestling with. It's much better than written status reports or project meetings, especially on touchy or political issues. See our "Sweet" Team Building Suggestion for one way to accomplish this.
Through time spent on project tasks such as status reporting and meetings, you can keep the team aligned on goals and informed on what's going on, bridging communication gaps and resolving issues together before they send the project off the rails. Information can be consolidated to provide progress status reports to management and update project plan documentation as necessary. Remember, the documentation is not there as an overhead task; it's mean to be used as thinking tools and communication tools—helping everyone see and understand what the project is supposed to accomplish, and how it's doing toward those goals. See our Effective Meetings Checklist and our status reporting resources for ideas on how best to do this part of the PM job in your environment.
The final portion of time would be spent communicating one-to-one with stakeholders and sponsors, a proactive give-and-take about the project at any given time. With sponsors, the project manager should provide summary updates of progress and issues. (See our example Executive Summary of Project Status/Risks.) This should not be a cursory communication just because management said they want a regular status report. This is your chance to keep the project alive in the sponsor's mind, and to keep the sponsor focused on their responsibilities for getting the project resources and helping make big project decisions. Any communication should be geared to showing how the project is doing against its goals and highlighting issues which require sponsor input or authority. With stakeholders, provide progress and specific feedback on performance of their resources contributing to the effort, or to address additional resource needs to mitigate risks. Our Project Influencer/Stakeholder Communication Plan shows how to analyze who you should stay in touch with during the project and plan the best way to communicate with them.