Hell: There is no all-loving God / Should atheists go to Hell?

The question, "should an atheist go to Hell" was a main topic of discussion today. For now, let's assume, for sake of argument, that God and Hell exist. Here is a simple outline of the argument:

Hell is a place that God created that is designated for eternal torment. It is eternal and the worst case of punishment possible. Demons, devils, and fire ravage you and make you suffer.

Atheist Joe is a Nobel Prize winner who found the cure for AIDS, gave millions to charity, stopped world hunger, and was an excellent person. He doesn't believe in God.

Rapist Steve is a terrible person. He killed every Jew in the world and raped many little children. Rapist Steve also drowned 37 cute puppies, burned down 16 churches, blew up an orphanage, and enslaved his family. He believes in God.

In each case, should any of these individuals go to Hell?

My Christian debating opponent argued that Rapist Steve should go to Heaven because he believed in God and was able to repent for his sins. He also argued that, no matter what Atheist Joe did, he should go to Hell because he did not believe in God.

I find this conclusion to be very immoral, evil, and representative of a sad case of ethics.
Atheist Joe was a great person and did so much to help the world, but he's going to be sent to Hell simply because he didn't believe in God, regardless of his actions.

If this representation of God exists, there's no way I am following him. This God is evil and I will never want to follow or worship him.

A person would never worship or want to follow a leader like this in reality, so why bother to worship a deity like this?

The whole notion of "actions don't matter but beliefs do, no matter what" is absurd. Actions do matter. Atheist Joe probably had very good reasons for not believing in God, so why should he be put into eternal torture for being skeptical although he did wonderful things? Wouldn't a true loving God say, "Joe, I'm all-loving and all-knowing and I know you used the brain I gave you to decide that I don't exist. I know, though, that you were a good person so you should have eternal paradise."

What about Rapist Steve?
Should he go to Heaven for simply believing and gain eternal paradise instead of Atheist Joe?
Well, though I don't think anyone should go to hell if it were to exist, Rapist Steve certainly does not "deserve" a reward for believing.

My Christian opponent also said that he would send Joe to Hell because he didn't believe.
Do we want people with this sense of ethics making key decisions in society?
Do we want these people as politicians, police officers, or really anything else?

My opponent, believe it or not, is not a strawman.

Hell is nothing more than eternal punishment for finite crimes.
Why would an all-loving being ever allow this?
Why would we ever worship a being who allowed this?
An all-loving being would probably do something like create a rehabilitation clinic to "cure" people before they got into Heaven.

Actions are more important than beliefs.
Be a good person and demonstrate this.