1. either sinners are mercifully destroyed after a period of suffering for their sinsThere are some problems with these views. The first view is built on pretty shaky New Testament ground. It involves the translation/interpretation of αἰών (forever/age) that most of Christianity has rejected. The second view has two problems:
2. or sinners eventually leave hell and enter heaven after a period of suffering for their sins
A. There is nothing in Scripture to suggest that suffering (however "suffering" is defined) in hell changes a person's character, disposition and nature. A person enters hell and he doesn't exit a Christian. The suffering isn't redemptive but punitive. Besides, a guilty person cannot atone for his sins like the sinless Christ did for sinners.It is tempting to think God's love, mercy and grace covers everyone. However, think about it for a second; if a person doesn't want to live for God here on earth why would he want to live in God's presence for all of eternity? Wouldn't heaven be a kind of hell for him, if you will? We know from the witness of the Scriptures that when sinners become aware of God's presence they recoil in fear/guilt. Imagine that for all eternity!
B. There is nothing in Scripture to suggest that a person stops sinning after he enters hell. He continues to rebel against God's will and, thus, lengthens his "list of crimes" in hell. With his forever expanding record comes endless punishment.
In a very real sense, hell is God's mercy for those who refuse to live for him and don't want to live in his presence.