Tragic..hmm, there are one or two that would pop into my mind, but, personally, I would have to go with the Flood. The entire population of the earth, wiped out except for the few in the ark. Not to mention the original earth being destroyed as well... this would have to be the most tragic story accounted in the Bible.
I personally believe the Bible is inspired by God, so I will be answering the questions you addressed to the Christians. Before one can actually can actually answer these questions however, We need to understand, to some small degree, God and also understand, completely, the story of Creation.
Let's start with creation, shall we? As you read the list of things God created, you will run into an odd, and seaming illogical creation step. In verse six of Genesis, you will see God taking the murky mass that is earth, and separating the waters into two sections. An outer section of water, which he calls sky, a gap within this outer layer of water, then a smaller ball of water within.
As you continue, you will notice that the rest of creation deals only with the inner section of water in that complex orb. What the book of Genesis is suggesting here is that, at the very beginning, there was a layer of water in the earth's atmosphere. An "aquasphere" if you will.
Now, the story of the flood in not that of a continuous rain that flooded the earth, but rather a story of this "aquasphere" having a hole punched in whatever forces were holding it up, and pouring down upon the earth with incredible force.
This leads me to one of my answers to your first question.
I believe this story was included, in part, to show the authenticity of the Bible as a historical record.
As is evidence of this blast of water hitting the earth and eventually covering it, we have what are known as "fossil graveyards".
These fossil graveyards contain the bones of mammoths, elephants, lions, tigers, saber tooth tigers, cats, dogs, birds, dinosaurs, fish, AND MAN all strewn and entangled together as result of the water sweeping them to a single place, or crushing them in place.
Not do we only have this, but also the affect water slamming into earth which would have also caused tremendous amounts of earthquakes worldwide. We can see that at one time, the earth was a Pangaea. This is not only seen from the two sides of the continents, but also from the undersea mountains which record where the separations took place.
Now, secondly, we must understand God's reason for wiping out the vast majority of his creation.
After Adam and Eve betrayed God in an attempt to become gods themselves, the door was opened for mankind to either worship God, or themselves. When we walk into the story of the flood, we have jumped hundreds, or perhaps even thousands of years, after the story of creation. The earth is well populated.
The thing about this story, is that every single man on the face of the earth had forsaken God. All they desired was to please themselves in any matter they deemed fit. The Bible accounts them being virtually incapable of thinking of anything other than evil.
To see His most loved creation, which was created to love and be loved, reduced to hatred and the love of all that is evil, God was in a state of absolute sorrow. The Bible states that he even "regretted" creating us.
God noted that there was only one family on the face of the earth that still loved him, and as such, he decided to save Noah's family and start over. The wages of sin was death, and since the people practically worshiped sin, the consequence was carried out.
Now for my other answer to that question,
I believe this story was placed in the Bible, to show a bit of God's character. His immeasurable Love and Mercy, but also his unwavering Justice.
The fact of the matter is, the people did not forsake god in a moment. It was a slow, gradual fade. It wasn't until there wasn't the slightest ounce of either love or good within the hearts of the people that God carried out the punishment.
Further, he SAVED Noah and his family. There is NO WAY that these people were living in a completely fallen society and remained completely pure themselves. It is obvious, upon thought, that these people were also sinners with the rest of the earth, however, they were the only ones left that loved God and at least tried to serve Him.
I could ramble on and on and on FOREVER on this story and other things it brings up, but Yahoo has actuaelly forbidden the length of this answer. lol
NOW, I must admit, I am thoroughly confused as to what it is you are asking in that second question. Could you perhaps re-word it so that I can accurately answer it?