What a simplistic view.
Even after assuming free will exists, humans are born into an already cruel and chaotic world, where the evidence of a theistic god and heaven (such as a Christian god who intervenes in both life and after death, and not one that doesn't) is insufficient to the rational mind. So a supposed deity like this would create beings in this universe and expect them to accept an effectively fairy tale, and when they don't, even if they are not cruel and immoral (e.g: simply by being a Buddhist), it sends them to hell. That isn't loving, that is a tyranny.
What you're describing is a sadistic test designed for most human life on earth to fail, even if they're moral humans. To punish those who don't see this negligent, supposed omnipotent authority as good.
On top of everything, what that ignorant person (OP's grandma) is professing goes against any level of empathy and kindness that is shown by decent christians & people, she's the prime example of someone taking the supposed "good" side, but in reality being a rotten hateful person.