No free will. You will not one a single verse in scripture which says that God gave us free will. The omniscience and omnipotence of God makes such a notion logically impossible. The reverse, called predestination, is directly spoken of and promoted in the Bible.
God is loving, but not towards all people. He loves His people, the one's He predestined before the creation of the world. The Bible is very clear that there are people God hates.
God is merciful because we don't deserve any good thing from a perfect God. That is part of the whole point. We weren't entitled to anything, but He sent His son to justify us and redeem us anyway.
Hell exists as a place of justice. All people do good any bad in their lives, and without forgiveness, God will correct all wrongs and reward all good. Contrary to popular opinion, Hell is adjusted for the individual. He doesn't throw everyone into the same fire, if Hell even literally involves any fire in the first place.