Example, when you pick up a tree to either put in the store house, improove happyness, or to build with you get a little evil sign, EACH AND EVERY TIME. Why am I being evil if I'm trying to help my people?

You're being evil for ripping a tree out of the ground, which is deforestation (?), which is an evil thing to do. In fact, there's an objective on one of the islands to "Deforest the whole island", for 30K tribute. (I wouldn't bother, but hey).

But the good you get is slightly larger than the evil, so it evens out.

If the storehouse is full of wood/ore/grain, why are people still going after these resources even if they aren't assigned to do anything?

They shouldn't, and I don't notice them doing so. Well, grain duh, because they also EAT it, and quite rapidly too. But if you are completely full of wood and ore, they shouldn't be gathering that anymore. UNLESS you made disciples, who will keep doing that.

If people migrate to my city, and abandon their city, why do I have to go capture it and get even more evil for capturing an abandon'd city?

Because you don't HAVE to capture it. In fact, why would you if you're playing good? Those other cities will only be small fries compared to your big city, the one you're trying to win the land with.
Good = one city. It's a design decision. Maybe not a good one, but there you go.
And building an armory to be evil is a bit peculiar yeah. Although you don't need troops anyways. Just build a wall, and the computer AI is too dumb to ever figure out how to get through it.

If you want to play evil the game is a snap, but trying to play good and your pretty much punished through out the entire game.

Well, I think the good game suffers from a few things.
1) It's really nothing more than Sim City.
2) The enemy AI is zero threat to your city once you have a wall up.
3) Enemy capital impressive ratings are too high. If they don't find my capital impressive enough to switch sides when I have 2 public baths, 2 universities, 2 retirement homes and 2 amphitheaters, why IS it suddenly impressive enough if I build one more of each of those? The numbers game is bullshit.

I recommend playing the game in small portions. I played on straight to island 7, and I'm bored to tears with it right now, so I'm giving it a week's rest, and then I'll play it again.

City building is fun, but the creature has REALLY gotten shafted. Btw, your creature's maximum height is size 11. Ie, the size of your own wall. No more huge critters...

Creston