My wife is the bigger church goer too, but i`ve had these chats a long time before I met her...as a young kid i`d ask my Lutheran Bishop grand father alot!
well, first ,yes God has humor , even twisted sense of humor ,otherwise we wouldnt have it! as you say we`re created in his image...but for us to be able to determine whats good and evil , we first need to know it/them, then we can decide which we want to be , or use...that determines the person.
cruelty is part of life , just as love is.....God had one (made one) of his angels 'go bad', become Satan and is to keep a 'balance' in the world....I really doubt people could live in an all loving ,all good world....we`d go nuts! LOL

My grand father used to read a book for me long ago in Norwegian..its finally been translated to English recently...you should read it...it is a humoristic , fun book , but explains alot...its called "The Golden Gospel" by Gabriel Scott...its a great story on the Human life seen by St Peter and God as they take a walk on Earth , where St Peter (the scoundrel, who even gets drunk one night and gets thrown in the slammer , where God has to come and get him out! lol) is always trying to point out Gods mistakes , and how to make things better , just to find out ,that its all created correctly!

heres about Gabriel Scott, plus a link to Amazon where three books are for sale!
I bought one a year ago after I found out it was translated....its hilarious and still you can learn some from it!
my wife has not read the book, she thinks its blasphemous.LOL ...but it really isnt...