I see the line you're trying to draw towards -
Let me start by answering your questions:
1. Yes.
2. Yes. More or less.
3. Yes, Yes.
If you're using the argument, if God is all powerful/knowing, why would he knowingly create someone with defects? Or better yet, I'll take that one step further - if, in the history of a 6,000 year earth, or 4.5 billion year old earth, whatever you want to believe, let's say there are a total of 20 billion humans who are born and have spirits. Why, then did God create 20 billion people when only 4 billion of them will be in Heaven? Doesn't sound loving, does it?
It does when you think about what those 4 billion have to offer to God. Say you love a girl, give her tons of stuff, and your everything. Then she doesn't appreciate it, and attributes it to her just being pretty and she deserves it, then she leaves you without batting an eyelash. That's pretty much how God feels about the other 16 billion people. However, those 4 billion people who are/will go to heaven are worth everything to him - worth Hell, worth Earth, worth the heartache and pain.
God is perfect. We aren't God, nor are we gods - we are created in his image, sure, but that doesn't make us able to understand everything. If God is real, and he has the power to create the earth, electron bonding and dark matter, I won't even pretend to understand how he thinks, or how moral/immoral he is. He is a jealous God, and I'll give him everything I've got.
I won't respond because I'll undoubtedly get more one liners and probably called some other internet reference to mock me, but I'll read what you have to say and chew on it.