How could Allah describe Himself as the All-Forgiving the Most Merciful one time and as the One Severe in punishment another time?

Allah is All-Forgiving and Most Merciful with those who commit sins without insistence, given man's human nature and weakness, and who repent of such sins and do not mean thereby to challenge the Creator. However, Allah Almighty destroys those who challenge Him, deny His existence, or visualize Him in the form of an idol or an animal and those who exceed the limits in disobeying Him without repenting and whom Allah does not want to forgive. If one insults an animal, none will blame him; however, if one insults his parents, he will be harshly blamed. How about the Creator's right? We should not consider the insignificance of the sin; rather, we should consider the greatness of the One Whom we disobey.