That’s exactly what I guessed it meant when I first heard the song. "There’s no way god would tell you to do that, I know the dude and that doesn’t sound lik him". I think it does make sense to think it as "the god I believe in would never do something like that".
Religious people do feel like they have a personal relationship with God. I don’t know which God J believes in (some Indian god perhaps?) but like you the line doesn’t sit well with me but that’s just because of my personal beliefs and I can’t expect every artists I like to share my views on everything.
I always liked how Dinosaur Jr was never about religion or politics but just inward and personla (I know the political is the personal to some people). My opinion of religion is the same as David Cross’s. Lines like "I know God" and "I need God beside me…" kind of make me cringe.