I listened to it, and I think GK actually handled it pretty well. He kept going, not acknowledging those who couldn't keep it in their pants for two seconds. He called him a great man, too.
I agree he handled it well. There were two or three cheers, which quickly subsided. He kept the show rolling, IMO the right thing to do. After all, he was about to launch into praise for Reagan's graciousness. If the cheering had appreciably continued it then would have demanded a response.