How does the mercy Christ taught about his Father fit in with the hellfire doctrine?

It doesn't, in fact the scriptures talk about, when the pagan religions were offering their children in sacrifice, or passing them through fire, that God found it disgusting and that it never entered his heart to do such a thing. He is a loving God and would not create a place of torment, designed for people that refuse to obey him. He simply will make them cease to be.