How can one "cancel out" set union as if I am using the additive property of equality of real numbers?
No you cannot cancel out C.
Suppose $C = \{1,2,3,4,5\}, A = \{1,2\}, B = \emptyset$
Then $A \cup C = B \cup C$ but $A \neq B$.
No you cannot cancel out C.
Suppose $C = \{1,2,3,4,5\}, A = \{1,2\}, B = \emptyset$
Then $A \cup C = B \cup C$ but $A \neq B$.