That is the theological line, yes. But again if he is omnipotent he could just make us not have any suffering and still have free will to move "closer" or not to belief in the god. Deciding to use suffering as the tool for this is inherently cruel.
And why does the god need us to believe in him? Is he that narcissistic? To me, as an atheist, it is clear that it is not the god that is so. God did not make man in his image, man made god in our image, just as we anthropomorphize everything (like aliens being human-like bipeds).