I think that you’re correct about Nietzsche in all the particulars you’ve mentioned. Nietzsche was brlliant, and he did descend into madness. And there’s no denying that he did posess keen insights into the tragic aspects of human nature. His efforts to construct a heroic and transcendent view of human nature were ultimately hijacked by the worst Europe had to offer. With the outcomes we know well.
I’ve read most of his works. Some of it made sense, some of it didn’t.
But in simple point of fact God is not Tinkerbelle, and His existence is not a function of human vanity, but of fact. One can either recognize it, doubt it, or deny it, but none of that changes it.