“the fear of the Lord is the beginning of wisdom. A good understanding to all that do it: his praise continueth for ever and ever.” (Ps 111:10)
It seems to me, EasternCelt, you are dealing with ignorance and exaggerating the speculative (what something is) over the practical (how that thing is played out).
God gave all of his mercy to the drama of himself with evil. He tested the angels, and he also tests us. We cannot speculate why the angels were tested to full satisfaction. But we do know that the certain elect takes the place of the fallen angels when the mortal soul does sincere penance throughout life (prayer, fasting, almsgiving). Also, we know from Thomas Aquinas, that those who do not punish themselves in penance, will have to be punished by God. “But if you be without chastisement, whereof all are made partakers, then are you bastards, and not sons.” (Heb 12:8)
Yes, we are children of God. But the dignity of man is so great, we are also soliders. Once confirmed and optimally well educated by the family: the soul has to learn to trust that goodness takes sacrifice and openness to truth. When this is practical, retribution not so much the sole action of God, but rather we give retribution to ourself in responsibity of our baptismal promises/vows by penance.