h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

I was brought up as a Christian and, in many ways, I would like to be a convinced or committed beiever but there are some basics which really take some understanding. For example if God made man in his image that presumably means physical likeness and 'mechanics'. So he must eat and drink and be capable of all the physical bodily functions which are fundamental to the nature of our bodies.Is that so?
But even more basic put a case.......
There is God - he has made a universe and proceeds to develop one tiny fragment of it (here I will suspend most of the creationist arguments) and decides to include a species of being which will have a superior intellect and a freedom of thought and choice not 'given' to other creatures. He makes decisions about the nature of this freedom of choice and some elements of instinct and emotion are included as well as rational thought. OK so far so good. But ultimately the plan goes wrong. Mannkind fails to behave well, choices are made which presumably would not have been options without the freedom of choice. Eventually God creates a son and sends him to show mankind the error of its ways and the deal is - behave properly, treat God as you should and you will survive happily for eternity, reject this and you will be damned. This was rejected by many and God's son was killed.
If one accepted this case as a plausible scenario why would it be wrong to see God as a failure whose experiment ended in disaster? Or can he be in some way satisfied by the many of his created people who behave wonderfully well and those who give their lives in the interests of those who have made 'the bad choices'? Furthermore why is God called a merciful God when the needs for 'his mercy' were included as options by him in the first place? The fact that so many creatures on our planet survive by tearing to bits and eating alive other creatures is poor evidence of a God of love and mercy.
If God exists - he has a lot to answer for if he doesn't mind my saying so - if he does mind me saying so than that might be another indication of his failure.