I've no problem thinking he could handle the day-to-day tactics of keeping walkers off his tail while still not grasping the situation with other human beings. He probably hasn't *been* very far from his shack since things started...
I have no trouble accepting that a crazy loner can stay alive in a cabin. I had trouble with was the fact that the cabin was so close to the Governor's town. Seems to me the Governor should have known his local territory a lot better, and is not the type to risk allowing someone to live that close to his town (regardless of how harmless the loner might have seemed).
I don't think he ever expected to get Glen to talk.
The entire interrogation was definitely a setup for Maggie, especially the part with the walker. If they had intended for Glenn to die, they could have easily guaranteed it by breaking his legs/feet, and they probably would have tortured his hands and eyes more. It was clear from the non-crippling methods of torture that they wanted to be able to stand him up in front of Maggie to show he was still complete and have maximum bargaining power with her.
Well, either that, or they fell into the common trope that they had to wuss out on the torture for no good in-story reason just because they couldn't afford to lose the character for the amount of downtime it would take to recover from real torture.