I am addressing what it means that G-d is "tov", and particularly how to understand the quote from Derech Hashem (along with other such quotes). The following is as was explained to me by a close student of R' Yaakov Hillel and R' Nochum Lansky (both noted and recognized in the world of Kabbalah), as well as made explicit in R' Chaim Friedlander's notes to Da'as Tevunos, Iyunim  and .
G-d in His essence has no positive attributions. He has no limitations and no definitions. The only thing that we can know about the nature of His essence is that it is שלם (Derech Hashem 1:1:2). Furthermore, all middos (attributes or characteristics) that we ascribe to Hashem are only a description of how He acts in the world, and not a description of His essence, which cannot be limited by such things (source and translation).
This extends to any description of attributes that one might apply to Hashem, including His being "good." "Good" happens to be distinct from other middos of Hashem, in terms of it being the most primary רצון (will) at play in creation, but even "good" and the desire to do good were in themselves things that Hashem created and chose to employ. Thus the Ramchal always uses terms such as מה שנוכל להשיג (that which we are capable of grasping)(Da'as Tevunos Siman 18) and מה שנודע לנו (that which has been made known to us)(Klalei Pischei Chochma V'Da'as Klal Aleph) when discussing these concepts.
Some read the words מחוק הטוב להטיב and think this means that Hashem is, in His essence, defined as being "good" and therefore "must" do good, or does good as a result of being good. In addition to ascribing specific limiting qualities to Hashem's essence, this is also a violation of Hashem's kadmus, which puts Hashem as preceding any other existence or concept, and being completely unbound in His רצון (sourced here). R' Yaakov Weinberg was very happy about the publication of the R' Friedlander Da'as Tevunos for clarifying exactly this very dangerous misunderstanding.
Therefore, what it means that G-d "is" good is that the most basic and underlying רצון that Hashem created and chose to act with in creating the world was "good."