They further advise me that the nuttiness of the Iranian government is partially because both the key personnel in the Iranian government are not playing with a full deck and because the extreme bellicosity gives them an excuse for clamping down hard on the country.
No. They're pushing for nuclear power and dissing Israel because doing so plays well with the general populace and isn't costing them any power.
Political (pro-democracy, anti- unelected clerical involvement) reforms or economic (socialist) reforms would be even more popular, but would cost the Mullahs power.
The president is hardly powerless, but he is not the most powerful man in the country, let alone anywhere near dictatorial powers (lol). When judging his approval ratings, you should also remember that he was elected as the anti-establishment candidate. A high approvement rating for Ahmadinejad is, if anything (big if), a sign of a lack of stability. Also, remember that he was an extremely effective and extremely popular mayor of Tehran before he became president, and that he is not a cleric.