Wow, what a lot of questions in one post! Are you actually looking for answers? If so I'll give it a shot. (I only know this because it's what God says in the Bible.)

• True Christians are not afraid of God, we call him "abba" which means "papa" or "daddy". Our form of fear is immense respect, not dread. Our relationship is one of total love. Of course, if God is not your Father, then you might have all kinds of differing thoughts about Him.
• Originally, God first created the angels, gave them free will. About 1/3 of them rebelled. Our ancestors were also given free will and promptly sided with the rebel angels. So God said "fine, try it without me."
• Since the next 6000 years are a demonstration of why that's a bad idea, God does not interfere with the natural consequences of that decision. (He does interfere just enough to influence history according to His plan - and help some of His children through a crisis or a little wink of encouragement from time to time.) But most people are rebels, not children. They are on their own.
• God is powerful enough to create the universe you describe, wipe it out, and recreate it again without waiting for another 13.8 billion years to elapse. He says he intends to to do exactly that. ("Then I saw a new heaven and a new earth, for the first heaven and earth had passed away. Rev 21:1")
• Clearly, since God creates and destroys and recreates universes He is not part of any particular universe.
• Bad things happening to our physical bodies seem like a big deal to us, but since we are promised new ones that will last forever, the loss of these temporary flesh and blood "avatars" are not that big of a deal. About the same as getting killed in a video game, actually.
• God has big plans for His universe (the new one) and the only purpose of this one is to give the human race a chance to sort themselves out into two groups: children and rebels (or wheat and weeds, as Jesus put it). Once all His children have completed "basic training" in this universe, they will be assigned positions of leadership in governing the next one. Rebels (weeds) need not apply.
• God's children are not insignificant. Each one of them is as important as, well, one of His children. He does actively shape their lives like a sculptor, using the tribulations of this world for that purpose.
• The whole point of the universe is to share it with His children for all eternity. “For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.” – Jeremiah 29:11
• When you are an infinitely powerful God, it is just as easy to create 200 billion galaxies as it is to create one moon. A lot of things He does are just to impress us kids. Wouldn't you if you had that kind of power?

Christianity doesn't claim to have it all figured out. We are just reporting what God has revealed about Himself.

So you were right in the first three paragraphs. You agree that the Universe can be that big but somehow there can't be a God even bigger. Then you doubted he had that much power (even though you see it on display everywhere) and all the problems you listed started piling up to the point where you wound up making up a completely different scenario than the one that God already revealed. In your version there is still a God as big as the universe but only because He is part of it. And you choose to believe that instead? Why?

Hopefully this helps. Everything I said is exactly what God says in the Bible. Ask me if you want me to "show you where it says that."