Digital Devil Saga/WMG

The world of DDS is a sequel of sorts to Shin Megami Tensei Nocturne
Hitoshura/The Demi-Fiend sided with Yosuga, and produced a world where the strong devour the weak. This explains the cannibalism, the presence of the Demi-Fiend, and, to an extension, why the goal of the game is to the end of the second game was a more positive "Conception."

The world of DDS is another world within the Amala Network
For starters, The Lady In Black did mention that the Earth that Hitoshura was born in, was one of many in the Amala network. The spinning barrels atop of are Amala Drums, but are used for a different purpose within the DDS world. God's power could be explained as him using as another avatar of his because: the way that the world was deleted is like what happened in Nocturne, but much stronger and God works in mysterious ways in BOTH series. Plus the Hitoshura as a Bonus Boss could be interpreted as Lucifer trying to recruit more demons in a different world, asking his most trusted General to go scout the worlds.

The Demi-Fiend is so powerful that you only won because he wasn't going anywhere close to all-out
The Demi-Fiend is definitely one of the toughest, if not THE toughest, of bosses in a series already known for being Nintendo Hard. Yet if you've played Shin Megami Tensei Nocturne, where he was the protagonist, the attacks he uses here (the Mute-causing Javelin Rain, Heat Wave, Stun-inflicting Xeros-Beat, and the overkilling Gaea Rage) were attacks that were fairly mediocre, as well as the demons he calls. The only demon that could probably do well in Nocturne's endgame is Titania (though the Megidolaon-casting Pixie is certainly nothing to sneeze at). Yet Gaea Rage does SEVERAL THOUSAND damage when your HP cap is 999, and that assumes your stats are near their max. Now imagine he was actually TRYING. Enter Metatron, Shiva, Beelzebub, Red Rider, Daishoujou and DANTE. Meanwhile he'd be throwing Focus'd Spiral Vipers and Freikugels all over the place. Not to mention he'd be using the Masakodos magatama which nulls EVERYTHING EXCEPT ALMIGHTY.
 * While I do agree with this, there are two things you seem to have forgotten. One of them is that he probably was using masakados, as the only attacks that work against him are almighty attacks or attacks with types that weren't in his game, and therefore he couldn't block. Also, there is a ridiculously powerful pixie in Nocturne like the one he uses in the bonus boss fight if you
 * Perhaps he got overconfident/let his pride get the better of him, explaining why he didn't have every powerful skill/demon he used in Nocturne?

The Tribhvana are .
Especially with the latter, because there is that one member who (like Bat) is utterly batshit insane.

Greg's Junkyard Avatar (Lupa) was deliberately introduced into the simulation.

 * Think about it. Before entering, he was one of the foremost enemies of the Karma Society. This means he was at least very well versed in military tactics. Once he died, the scientists of the Society took whatever data they could from the corpse and poured it into the Junkyard, intending for their enemy to become one of their soldiers. Fits what a Karma Society scientist would do.