Correct. The reality is that most of Catholic will probably never reach the state of spiritual life in which they are sorry for their sins because they hurt God rather than due to fear of hell.
You're probably right unfortunately, but that's in large part because you find it "man-centered" to talk about how sin
hurts man and instead talk about how it contradictorily "hurts" a God from Whom nothing can be taken away, and can't fathom there may be more depth to the Catholic Faith than what is printed in the Baltimore Catechism.
God doesn't forbid sin because He is some dictator Who must have His way or else. He forbids sin because of how harmful it is for us.
Fear of punishment will probably remain the main driving force behind contrition for majority of Catholics, so it makes sense to strongly instill that in children - although not being a parent I would not dare to make a guess as to how and when to do that.
Yes, but eventually fear of punishment will lead into hatred of the one threatening to punish, and at any rate will certainly not lead to love. Which is why the spiritual writers stress that one
must get beyond servile fear, otherwise one's spiritual life will be quite deformed.