Why did God allow for the striking-down of people in the Old Testament? How is this reconciled with the dogma of a loving God?
Protestants and modern-day “Jews” don’t have an answer for this — one beyond dualism or “mystery”, I mean. But the Church does.
There is mortal sin, and there is venial sin (1 John 5:17). Mortal sin — willful and of grave nature — separates one from God, practically killing the soul. Venial sin — all other — must simply be cleansed, and it does not eternally separate us from Him. And this distinction is shown in the Old Testament.
Among mortal sins punished: irreverence (2 Samuel 6:1-7), despair/disbelief (Numbers 11:1-3), and false claims of authority (Numbers 16). These crimes have always been condemned.
Why did punishment change from body-centric to soul-centric? First, it didn’t, because unrighteous people were also kept from entering the Limbo of the Patriarchs, which, after Christ’s Sacrifice, later led to Heaven. Second, temporal punishment was the only way to get at the Jews’ consciences: As liberal scholars love to point out, the majority of Jews did not believe in an afterlife!
God does not desire death, though it can be used to give us the best chance at salvation (2 Peter 3). (I think here of St. Rita and her sons.) Even in the old days, He merely wanted a contrite heart (Psalm 51:17), and He wanted devotion.
There is no change in principle: God is immutable.
Martin Luther said and wrote many heretical things, but here are a mere five quotes, along with Biblical passages that disprove them.
1. “For reason is directly opposed to faith. This is why you must let reason go. It must be killed and buried in believers.” 
(Answer: Proverbs 14:15, Colossians 1:9, Colossians 4:5-6, 1 Thessalonians 5:19-22)
2. “..[A Christian] could not lose his salvation, however much he sinned, unless he refused to believe. For no sin can condemn him save unbelief alone.” 
(Answer: Hebrews 10:26-27)
3. “Be a sinner, and let your sins be strong, but let your trust in Christ be stronger, and rejoice in Christ who is the victor over sin, death, and the world. We will commit sins while we are here, for this life is not a place where justice resides. …No sin can separate us from Him, even if we were to kill or commit adultery thousands of times each day.” 
(Answer: Psalm 4:4, Matthew 5:48, Hebrews 10:26-27)
4. “It is good that we have such a man [Jesus Christ], because God in himself is cruel and bad.” 
(Answer: Psalm 51:1, Jeremiah 9:24, Jeremiah 31:3)
5. “I miss more than one thing in this book [Revelation, aka Apocalypse], and this makes me hold it to be neither apostolic nor prophetic…and [I] can nohow detect that the Holy Spirit produced it. …My spirit cannot fit itself into this book.” 
(Answer: Revelation 22:19)
1. Luther’s Sermon on Matthew 19:13-15. “What Luther Says,” 1:485-486 (entry 1440). [link]
3. Let Your Sins Be Strong: A Letter From Luther to Melanchthon. Translated by Erika Bullmann Flores. [link]
5. M. Reu, Luther’s German Bible: An Historical Presentation Together with a collection of Sources (Ohio: The Lutheran Book Concern, 1934) 174-175 [link]
Protestants claim that Confession (aka the Sacrament of Reconciliation) is unnecessary, but that claim totally contradicts the Word of God.
Kevin M. Tierney wrote at Catholic Lane:
When one repents of their sins in the Bible, it is always done to another individual.
The clearest case of this is with David after he commits adultery and arranges the murder of the woman’s husband. David only repents of his sin once God’s representative Nathan confronts him. (2 Samuel 12:1-13) David knew he had sinned grievously in his adultery, otherwise he would not have had Uriah killed to conceal his crime. Even knowing the extent of his guilt, he refused to repent. This speaks to the human psyche’s ability to rationalize away what they do so that it is no longer a sin. This is a skill humanity has nearly perfected in today’s age.
Another thing worth considering is how professing something vocally changes things. It is very easy to say something silently with no witnesses. It is something altogether different when you have to acknowledge your faults before another. One could say it becomes a far more serious endeavor when you are not only willing to renounce your sins, but renounce them forcefully out loud. The first step on the road to repentance requires you to renounce those sins. While it possible to fake such, it becomes far harder to do so. (It goes without saying that such a faked confession would be a sacrilege, and compound sin upon sin!)
Whenever I hear Protestants say that confessing sins to a priest is wrong, I am reminded of Luke 5:21, in which the Pharisees say that only God can forgive sins, and doubt Christ’s ability to do so. They are so blinded by their ideology that they can not recognize that God (Christ is God in human form, both fully human and fully divine) is before them.
Am I brazen enough to compare priests to Christ? In a way, yes, because priests serve in persona Christi (a Latin phrase, meaning “in the person of Christ”).
In John 20, Christ clearly gives the Apostles the power to forgive sins.
“And when He had said this, He breathed on them and said to them, ‘Receive the Holy Spirit. If you forgive the sins of any, their sins have been forgiven them; if you retain the sins of any, they have been retained.’” – John 20:22-23 (NASB)
From there, the Apostles passed down their “powers” through apostolic succession (a topic I plan on writing about in the future). Those “powers” are possessed by our bishops and priests today.
So, like Devin Rose asked, would you have confessed your sins to an Apostle? If not, you contradict Christ. And, if you would have confessed your sins to an Apostle, it only makes sense that you would confess your sins to a priest.
My first confession was the week before I entered the Church. I was so nervous, but I tried to be prepared: I had done an examination of my conscience and had printed out a version of the standard Act of Contrition. I was ready, or at least, I thought I was. But there was just something unexplainable about that few minutes. I truly felt like I was speaking with God. Like Laban felt with Jacob in Genesis 30:27, I felt that God blessed me, forgave me, and transformed me through His priest.
That is why the Church teaches that Catholics should confess at least once a year (the saintly Cardinal Arinze commented on that here). The Sacrament of Reconciliation is an amazing gift from God, so we should utilize it.