Interesting point you raise Grant
"Does that mean a Muslim can hit him/herself with a hammer on the nose and expect that their sins are forgiven?"
We can understand God through its attribute , one of the most beloved to him is mercy ( Arahman and Araheem, most merciful and most loving)
It provide for us and sustain us, and its ready to come running toward you and listen to you , but it want you to make an effort or take one step
"Malik reported that Allah's Messenger (may peace be upon him) said: Allah is more pleased with the repentance of a servant as he turns towards Him for repentance than this that one amongst you is upon the camel in a waterless desert and there is upon (that camel) his provision of food and drink also and it is lost by him, and he having lost all hope (to get tbat) lies down in the shadow and is disappointed about his camel and there he finds that camel standing before him. He takes hold of his nosestring and then out of boundless joy says: 0 Lord, Thou art my servant and I am Thine Lord. He commits this mistake out of extreme delight."
God has created this universe and appointed us as vicegerent here, we are responsible here , so it provide us with freewill, rationality to think and consciousness so we can know the creator ; also send down revelations and Prophets as role model ;
On the flip side human has a lower self of desires and ego, and external Evil which glorify human desires and who want to divide human ; so it cannot know itself and not know the creator.
hence we see good and evil , suffering and harm, while also human capability to rise above its desire to be compassionate, sympathetic.
Now we have freedom to use above capabilities and guidance to recognize God and be mindful and grateful or be arrogant and reject what is send ( since we have free will)
But if we as collective human or part of it does not do its job , we will be tested with trials and tribulation , its for our own benefit so we can remind ourselves to come back to faith and certainty and be a force of good for ourselves, our parents, people around us
We are asked to project all the God like qualities while being the owner of this world ( there are 99 names of Allah ) and make this world a better world for all its inhabitants
To your second point , why atonement cannot be earned by sacrifice ; because it will make God unjust and un-merciful and not so intelligent.
Why? As I explained earlier we have been given capabilities ( through Soul) and intellect and ability to think ; If success is defined by some one else death than why would be given such capabilities
Similarly on salvation is through Jesus ..
Say a person kill 100 people and believe in Jesus would it still be just ( to send it to heaven) compared to a person who lived a pious life , took care of things and relations its responsible for ; would that not make God unjust