Your first statement is a pretty classic and naive position. For me at 8 years or so I rendered the objection of "pain" in terms of volcanoes.
The standard, and again naive, rejoinder in mainstream Christian theology is that God had a pattern for the World that didn't include such types of pain and destruction but that man chose not to follow God's plan (as allegorised in "The Fall" in Genesis). Thus we chose to go it alone, and you can read the various theories on how that has a Universal effect too.
To raise the basic Argument from Suffering you really should look past the first-tier argument and present it anticipating The Fall.
In my limited understanding suffering appears out of the axioms of free will. To make us human, with the ability to choose to love, choose to care, choose to follow God or not, we require free-will. Otherwise it's just "echo 'i love you'" rather than a genuine emotion.
Your question should be "is it better not to create our Universe, with the possibility for love, if there is also a possibility of suffering". You may come to the same conclusion, that a benevolent being shouldn't turn Creator when faced with those possibilities ... but then if they hadn't you wouldn't be here to make the objection.
tl;dr "The Fall" and "free will" are the standard, Biblical, Christian counter-arguments that stand against Suffering and allow for a loving, benevolent God to be creator of a Universe such as ours.