God's Law vs Grace - How Do They Fit Together?

The biggest difference I have discovered between the law of God and grace of God (they are NOT opposites, BTW) is that a proper understanding of the radicality of God's grace brings greater obedience to the law of God but knowing God's laws does not bring the liberty that only the good news of the aforementioned grace can bring.

In other words - knowing the law does not make me good but understanding God's perfect holiness, my sinfulness compared to Him and yet His remarkable love for sinners like me causes my heart to desire obedience more than I ever have in over 20 years of walking with Jesus, rather than feeling coerced or manipulated in to "behaving" by fear.
I think that when we get how much we are loved and accepted, in spite of, not because of our behavior, then we will have the tools in our toolbox to find the lilberty that Jesus speaks of all throughout the Bible. It's the ability to walk with Him naturally,  like a friend, and you love a little better and you get a little better and as long as you remember to look at Him you won't get prideful because in  His light we are all, like Paul, the chief of sinners. This lets me share Him and His love and not my shadowy, crappy carbon-copy. Our best representation of Him is like the difference between a fax machine and 3D TV. It is a POOOOR reflection at best and frankly that is exactly the way it should be! Admit your sinfulness to Him and your inability to love like Him. Then let Him love you in your garbage and you have opened the door to loving others and being loved, in a completely different way. When you are loved without the masks then you know they are loving YOU. My buddy Steve Brown says, "If you knew me the way Jesus knows me you wouldn't like me and if I knew you the way Jesus knows you I wouldn't like you either. Deep down we all know the world (Church included) is not a safe place to bear all our garbage but when we go to Him and find His never-failing love, it allows us to freely and naturally love others in their struggles - just like Jesus does as we walk through ours.