OK, here is my understanding of things. It may be flawed, but, hey. I'm human.
In Genesis God's stated aim was to create mankind in His image. God Himself is a tripartite being (at least; Revelations says God has seven spirits) - Father, Son and Holy Spirit - each part interacts with others by consent. This is similar to how our body, mind and will are separate but unified (our mind can override our bodily drives, and our will can override our mental desires). God's plan, as Jesus prayed, was that we should be one with God the Father just as He is one with God.
Mankind was supposed to willingly allow God to speak and act through them, as Jesus demonstrated ("The words that I speak to you I do not speak on My own authority; but the Father who dwells in Me does the works."). In this way, we allow God to operate in this universe through us.
As creations of God, He has full rights over us, as we have over anything we make. If we make a pot out of clay, we can use it for whatever purpose we want, and we can even destroy it, and no-one has the right to stop us. As created things, we have no rights, no say in what God chooses to do with us, any more than a pot has with a potter. When we talk about our sentience, our self-awareness, this is only important to us. Similar to those films about whether androids could be considered to be self aware or alive. The tests are those we devise, because we could never devise a test we would fail. However, before a storm or earthquake, it counts for nothing. Our sentience, our self awareness, does not cause the disaster to treat us any different than a rock or plant.
What is sometimes called Original Sin is an aspect of self awareness. We became content with our level of knowledge, wisdom and righteousness. We decided we were sufficient to control our lives and decide what is right and wrong without reference to God. In effect, we became our own gods. We covered up our limitations with opinions, assumptions and self-justification.
In order to complete His plan, God created two types of people. There are those whose name He put in the Book of Life. God has chosen them to be people of grace, to become aware of Him and receive His mercy, not because they deserve it, but because God chose to give it to them. Through the Holy Spirit, they are regenerated and perfected, but only as long as they allow God to do the work. If they choose not to continue on this path, then God cannot use them, and their name can be removed from the Book of Life.
The other group of people are totally unable to receive God's grace. No matter how things are explained to them, it is impossible for them to understand or accept it. These are the people of judgement. Their role is to demonstrate what Man is like without God, caring more for their own desires than the needs of others. Their purpose is to shape the people of grace, to refine them through challenges, tests, trials and persecution. Their actions cause the people of grace to become stronger, more faith focussed, and more driven to become what God wants them to become.
Natural disasters play a part in this, as does war, famine and sickness. In these circumstances, we have a choice, whether to think of ourselves, or to help other people. In an earthquake, we can just get ourselves to safety, or we can work to free those that are trapped. In sickness, we can focus on our own problems, or we can accept them and move on, becoming an encouragement to other sufferers.
Now, Jesus Christ's mission was to remove any excuse a person may have for rejecting God. By dying for the sins of all mankind, any justification we might have for our actions is removed. It is reduced to a single test - do we accept Christ or not? If we accept Christ, we learn to stop depending on our own faculties (dying to self), depend on God's resources, and become more focussed on the needs of others than our own desires. At least, we do as long as we choose to. God does not override our will.
The universe that we now experience is a testing ground, where God sorts the wheat from the chaff. It is the universe to come that is His true goal, a universe that operates in different ways to this one. God can only use the people that passed the test of this universe - who willingly allow God to operate through them, and who serve others with love and kindness, seeking the good of other people above themselves. These people will be fully transformed into the image of God in the same way Christ was transformed.
The people of judgement and those whose names are removed from the Book of Life will go to a kind of scrapheap. What that is, I cannot say. It may be annihilation - a second death, or it may be a quarantine area where they cannot interact with the rest of the universe, or it may be something else. I believe that those that go there will clearly know why they have been put there - the choices they made, the things they did and the things they said - and will accept that God has treated them justly.
As I said. This is my understanding. I could be wrong.