What it means is that God has a beard, walks around in Heaven, etc. Just because he is everywhere at once in spirit it doesn't mean that he can't walk around like a man in Heaven. But the creator of man in his image, does not mean that the creator is a man. Now about hell: It is not like the devil is following God's rule to torture them, it's just that he is pure evil and evil likes to torture. God and the devil have really no control over who goes where, whoever the God and devil and both racing to the finish line to see who can get to your first. If you believe in no God or devil than then the devil gets a leg up, because you don't have to believe in the devil to go to hell, obviously.
Maybe you have it wrong Moonsinger. God gave you free will and you have to make the decision to go to heaven or hell. It may seem like a simple choice but no, you must accept Jesus as your savior. God expelled Lucifer from heaven and decided to contain him and created hell, but hell wasn't nessicarily evil yet, the devil made it that way. So God pretty much says, if you refuse me and choose to be a friend of the devil then spend an eternity with him, see if you like it. But God loves you but his love cannot make you go to heaven. The rules were all who accept their creator and savior go to heaven, but the devil has hell in his control and all who are evil, which should be a low number but isn't, go to hell. Look at the story this way now. And remember, before Jesus died no one was let in heaven, there was "good" hades and bad" hades but then all who were hellbound were released into hell and all who were heavenbound were released into heaven.
Your mother baked the cake and tells you that you have to go through the door to get it. Next to the kitchen is the closet (hell). Right next to the kitchen door is the closet door, and your uncle (the devil) says he will give you a cupcake (not quite as big of a cake) if you don't walk through the door. You reject the cake and take your uncle's cupcake. But before you eat the cupcake your little brother tells you that you will get a whole cake in the kitchen. You say you don't want to have to go along with all of the kitchen door rules and say your just gonna eat the cupcake. Your little brother goes through the kitchen door and your uncle throughs you in the closet and locks the door. Your mother begins to cry but you are stuck in the closet forever because you refused just to walk through a simple door. Your mother cannot get you out while your little brother is stuffing his face with so much cake that if he was still in the living room he would be 600 lbs. All you had to do was walk through the kitchen door but because you were stubborn and refused to do something so simple, your uncle get's his chance to through you in the closet.