can you just omit the sherry or do you need to add something in its place?

I substitute balsamic vinegar for sherry when I have no sherry, for some things like soup. If it is a large quantity of sherry you might sub in 50% balsamic and taste before adding more. Also, if you edit your tags to include "sherry" you might find similar previously posted "pickles."

I made without sherry because I only had white wine on hand and the dish was fantastic! I also threw in a few left over sage leaves and used butter only for the roux (olive oil in smaller quantities for the rest).

The sherry adds nice flavor to the sauce, but it's not necessary for the purposes of the chemistry of making the dish. If you have white wine you could also use that instead. Or you could just omit it and you would be fine, you'd simply have a slightly different end flavor.

Probably not--most of the sherry probably cooks off during the sautéing.