Why have my paper crafts hung on the wall deformed and what can be done to prevent this?
I can think of a couple reasons why your paper curled like that:


Vertically displayed paper has a tendency to curl more in my experience, especially when it has no support. 
The gum/glue itself may be causing or aggravating the curling. Some adhesives and coatings draw, or shrink inward, as they dry. (You see this in nail polish, too, when some thicker top coats cause the color to pull away from the tips.)


To counteract the curling, you could try a few things:


Coat both sides of the paper with the gum/glue, or a varnish. The drawing affect would be lessened as it would be trying to curl in both directions at once.
Tape the paper down while working and allow to dry thoroughly, leaving it overnight to 'cure' before removing the tape.
Add a stiffer material as a backing. Thin sheets of metal or wood would be the most stable. But, chipboard or even a heavy cardstock would afford some further support.