The laws of physics themselves cannot be the first cause because they are not logically necessary. There is nothing in the nature of the laws of physics to hold themselves in existence, as is demanded of a first cause. We can easily imagine a universe where the law of gravity was a little different (or a lot different) with no logical contradiction.
You're right that "as we work backwards in the chain of causation things get simpler and more fundamental."
The Catholic Church teaches that simplicity is one of the attributes of God - that God is not "composed or divisible by any physical or metaphysical means."
-http://www.saintaquinas.com/article5.html
I was talking about this attribute earlier as part of talking about oneness.
So how can complete simplicity have a mind?
By mind, I do not mean a brain. A mind is an "I" that can reason and choose. True, we have only seen minds connected to brains, which science points to having evolved over time. But though a brain is complex (composed of many parts) a mind is simple (indivisible, no matter what you do to a brain).
So I propose again that the only plausible first cause that is completely simple (indivisible) is a mind.
Now, on to the discussion of hell:
I think I need to clarify my description of hell - by no means did I mean to "smooth over" hell, or describe it as a kind, gentle place where there might not be as much suffering as we had imagine. I meant to say that God is not imposing an arbitrary sentence of pain as a punishment upon those in hell; rather, God lets them have what they want - he leaves them to try to find their happiness in themselves. But when they turn entirely inwards upon themselves for their happiness, what they find there is hell. They feel utterly "the anguish of God's absence", as you said. Their suffering is not a withdrawing of God from them, or even a withdrawing of God's love from them. Rather, their suffering is by nature of what they become when they themselves turn from God completely and finally.
So, why does God not annihilate them or put them to sleep to preserve them from the suffering they inflict upon themselves? Both are logically possible for God in His omnipotence. And you're right, there can be no lessons taught in hell. I leave C.S. Lewis to explain:
"Let us try to be honest with ourselves. Picture to yourself a man who has risen to wealth or power by a continued course of treachery and cruelty, by exploiting for purely selfish ends the noble motions of his victims, laughing the while at their simplicity . . . Suppose, further, that he does all this, not (as we like to imagine) tormented by remorse or even misgiving, but . . . a jolly, ruddy-cheeked man, without a care in the world, unshakably confident to the very end that he alone has found the answer to the riddle of life . . . the passion for revenge is very deadly sin. Christian charity counsels us to make every effort for the conversion of such a man . . . [but] Supposing he will not be converted, what destiny in the eternal world can you regard as proper for him? Can you really desire that such a man, remaining what he is . . . should be confirmed forever in his present happiness — should continue, for all eternity, to be perfectly convinced that the laugh is on his side? . . . You are moved not by a desire for the wretched creature’s pain as such, but by a truly ethical demand that, soon or late, the right should be asserted, the flag planted in this horribly rebellious soul, even if no fuller and better conquest is to follow. In a sense, it is better for the creature itself, even if it never becomes good, that it should know itself a failure, a mistake. Even mercy can hardly wish to such a man his eternal, contented continuance in such ghastly illusion."
Even if those in hell do not become better, Justice demands that the truth of what is right be asserted to them, even if by pain.
But why must this suffering be eternal? Justice demands that too. Remember, this is one punishment. God is not continuously renewing the punishment for all eternity, with Justice never satiated. This is one punishment - to be left to themselves - which by nature and Justice lasts forever (or from a perspective of outside of time, is fixed in eternity). But how is this punishment not too much? Eternal suffering for temporal crimes? Because the temporal crimes were so bad. To choose oneself over eternal goodness; to choose oneself instead of perfect love - such a crime justly merits that such a one should be allowed what they wanted, to be left to themselves forever. We may see this imperfectly now, so it may seem unlikely, but we can at least see how from a higher perspective such could be true.