Struggling with sins

I have started reading the old testament a few weeks ago, currently in the chapter Joshua. One of the thing that strikes me the most is how strict God is when it comes to the issue of sin and the punishments that goes with it, that, I find it really hard to grasp. I may be reading the scriptures in a very different (wrong) perspective, because I didn't truly understand who God really is. I am still confuse/or more of a surprise when I read the old testament. Maybe because I thought I know God well from the new testament. I felt God's great anger and deep dissapoinment each time His people sinned. Although I understood the punishments given, everything seems very bloody and deep down in my heart I felt fear. Hai.. I really don't want to feel that way. I have been trying to think very hard...quite foolish also because the answer is not there by thinking hard....
In the past, people sinned although God was right infront of their eyes...and what yet we are now living in this period. We need so much faith and repentence.
This topic is still a struggling to me. I hope oneday I will fully understand.

Below is a scripture I read while I was browsing the Bible.

~totoro~

Ezra 9

5 Then, at the evening sacrifice, I rose from my self-abasement, with my tunic and cloak torn, and fell on my knees with my hands spread out to the LORD my God 6 and prayed:
"O my God, I am too ashamed and disgraced to lift up my face to you, my God, because our sins are higher than our heads and our guilt has reached to the heavens. 7 From the days of our forefathers until now, our guilt has been great. Because of our sins, we and our kings and our priests have been subjected to the sword and captivity, to pillage and humiliation at the hand of foreign kings, as it is today.

8 "But now, for a brief moment, the LORD our God has been gracious in leaving us a remnant and giving us a firm place in his sanctuary, and so our God gives light to our eyes and a little relief in our bondage. 9 Though we are slaves, our God has not deserted us in our bondage. He has shown us kindness in the sight of the kings of Persia: He has granted us new life to rebuild the house of our God and repair its ruins, and he has given us a wall of protection in Judah and Jerusalem.

10 "But now, O our God, what can we say after this? For we have disregarded the commands 11 you gave through your servants the prophets when you said: 'The land you are entering to possess is a land polluted by the corruption of its peoples. By their detestable practices they have filled it with their impurity from one end to the other. 12 Therefore, do not give your daughters in marriage to their sons or take their daughters for your sons. Do not seek a treaty of friendship with them at any time, that you may be strong and eat the good things of the land and leave it to your children as an everlasting inheritance.'

13 "What has happened to us is a result of our evil deeds and our great guilt, and yet, our God, you have punished us less than our sins have deserved and have given us a remnant like this. 14 Shall we again break your commands and intermarry with the peoples who commit such detestable practices? Would you not be angry enough with us to destroy us, leaving us no remnant or survivor? 15 O LORD, God of Israel, you are righteous! We are left this day as a remnant. Here we are before you in our guilt, though because of it not one of us can stand in your presence."