I used to have a fear of death. It says a lot about neurology and psychology that a silly little thing like a dream can get rid of that fear. Let's just say that eternity is a very long time, but almost no time at all when you're not experiencing it, and that the void of nothingness is surprisingly comforting, not very unpleasant, and you get used to it very quickly. Quite a few millennia went by, though probably short of a kalpa. There was a nice sense of waiting for something, but who knows if it was reincarnation or an afterlife or just waiting for the End. In any case, it's not unpleasant, and it was very easy to convince myself that that's what's going to happen. Why guess about anything else, when you've got something you like?
I was an atheist for a while, too. I'm not anymore, but it doesn't have to do with the dream. It's just more fun. I mean, being in a religion or being an atheist is kind of like being on a team--you've got other people who are on the same general side. And when you've got a religion, it's like your team has cheerleaders, even if they're only in your head. I like mine. Even if I didn't have my team, I'd still like my cheerleaders.
I don't see any reason to assume that God would make the world in a certain way. The question of why evil exists is a pointless to ask, really--do your part to fix it, instead of complaining. Nobody likes a complainer. Why would you even think God has a plan? It's not important either way. If you think being religious can make you be a better person, then be religious; if you think you'd be a better person as an atheist, do that.
...I've always thought about wanting to be a Christian priest. It's not against my religion, maybe I'll follow through on that someday.