The awareness of the existance of the Lord and the wisdom of the Spirit, will doubtlessly enable kids to grow healthy. In most cases, I see that the kids see only one side of the Lord and they grow with the same image which is limited to the wisdom of the one who introduced them to the Lord.
Kids who grow up in the Lord, are either taught of the Lord Jesus Christ in the Gospel who is forgiving or only thought of the Lord in the old testament who was angry with the Israelites who where murmuring, the Lord in the Book of revelation where the there are so many plagues and sufferings in the lives of the people.
Most of the children from the Pentacostal churches are taught the image of the Lord which is from the Book of Revelation, and they feel that the Lord in His wrath will send so many plagues and sufferings on the earth, they feel that God may not forgive them. They are more focussed on the destructive image of the Lord and they are unable to feel the Love and the Compassion of the Lord. On the other hand when I look at the children from the Catholic schools, they grow up being taught only the loving nature of the Lord, they dont realize the miseries that will come in when they break the covenant or the commandment.
Satan tries to attack both the children, the ones who don't know the love of God by putting them into the guilt. The others who don't understand the wrath of God by leading them into sinful life. He plays around with the lives of both the kids. Sometimes it is gets more dramatic when these two kids come across each other, though they share the same Lord, it seems as though they dont understand each other.
It is a blessing if the kid grows with the fence on both sides. The knowledge of His love and His wrath, so that they know that they should fear the Lord when tempted to sin, and they should know to run to the Lord when they are filled with guilt.
I was saddened by your comment about children in Pentecostal churches being taught that image of God. You see, I was raised and am still a "Pentecostal" and that definitely was not my experience.
I grew up in an area that was predominantly Catholic and Lutheran and I have to say that amongst my friends the opposite was true. To many of them God was far away, angry and waiting to pounce on them with a big stick.
What you say in regards to the importance of teaching or children is very true. However we have to be careful about stereotyping. You can find the yoke of legalism in any denomination just as you can find congregations filled with the love and joy of the Lord.