My, you are full of questions, aren't you?
I'll do my best, but remember ... I'm just a schmo trying to figure it all out, too.
We are fallen and evil. We come pre-cursed with the consequences of the sins of our parents "to the third and fourth generation". There are "powers and principalities and rulers of this age" who mean us harm. We have a fallen nature that impacts our "not free" will. ... Have you ever met the adult children of an alcoholic? As a rule, they either grow up to become a chip off the old block, or they rebel and become 100% the opposite of their parents, or they are forced to struggle to somehow deal with the scars of the past. Different children, exposed to the same abuse, have such different results. The difference must be internal. So we are all exposed to such a variety of sin, why should we not respond differently and why should God not need different methods to save different sheep?
Changing focus slightly, it isn't all about us. I find I need a constant reminder that my comfort and happiness is NOT God's highest priority. I was saved for the same reason that I was created ... for God's glory. That means that God has plans at work and things to demonstrate that are more important than me. I am one of those people who have a dramatic story of being a sinner and being saved by the sovereign act of God's grace and mercy. People like to hear it in churches, but I hate to tell it. Most of the time, people get the wrong idea. I did nothing praiseworthy. It was never about me or my choices (except for the sin, that was my decision). It is ironic, but what really fascinates me is the story of someone who grew up in a Christian home and was saved at such a young age that they can't even remember a time when God wasn't a friend. That is so alien of a life and concept to me.
I have come to the conclusion that both serve a purpose. God saves people like me so that he can show and I can testify that no one is beyond the reach of God. I personally think that God chose to save me just to prove that he could do it. He selected someone least likely and utterly undeserving, and did it just to prove that he could. As for the people who get saved growing up in the faith, I think that God does it to reveal just how faithful he is ... showing compassion to a thousand generations that love him and serve him.
More speculation than usual here. Let's start with the obvious ... it can't mean every person in the whole wide world, because that would require universalism and then the parts about eternal punishment don't make sense.
So looking at it from an OT perspective, if you were a Jew (child of Israel) then you had access to the Temple and forgiveness of sins. If you were anyone else, sorry but you are damned (if they had hell, actually, you are an enemy of God and worm food). Along comes Jesus and SALVATION is for Jew and Greek alike ... the whole world united by one Gospel.
Honestly, I had accepted all of the points of Calvinism except this one before I ever heard of Reformed Theology or Calvinism or TULIP ... just from reading scripture for myself. This is an argument that I care least about. Here are your two Theological Choices ...
1. Jesus Death forgave all sin ... but was somehow ineffective for most people (they are going to Hell).
2. Jesus Death was 100% effective ... but only applied to some people (those going to heaven).
So, pick your poison.
I guess that depends on why it bothers you.
Do you want to be in charge of your salvation?
Are you afraid you are not saved now?
Are you afraid you might fall away in the future?
Does it seem unfair to the unsaved?