"I'm not rich, I'm not a criminal, I don't need this much security causing me this much hassle. "
I guess the real question is "What are you trying to accomplish?" If you're not a criminal and you don't like hassle and you're not worried about someone compromising your phone then why encrypt at all ? It sounds like your using a capability that far exceeds your needs and is causing you a problem.
Situations where Apple's policy makes a lot of sense is for people that use their phone for work and personal activities. they have business contacts, perhaps e-mail, security information like passwords or WiFi passcodes on their phone and they want to ensure that sensitive information isn't compromised. Its a good system to ensure your data remains under your control and cannot be easily compromised.
In terms of backup, I have my iPhone setup to backup wirelessly to my Mac and that backup is encrypted. Despite Apple's best efforts, I feel like a local backup on my own computer that's encrypted is more safe than one in the cloud. Not sure why you feel you're being forced to iCloud.
Security can be a hassle, but, its also a choice. If the benefits and needs for it warrant it then it makes total sense. In your case, it sounds like encryption is overkill to begin with.