In order to make sense of American foreign policy, you have to start thinking like a cold hearted politician rat-bastard. It ain't always easy.
"1) because their leader is an oppressive tyrant. I don't like that at all either!
but our country actively trades with several oppressive tyrants."
Yes we do, but Hussein is a famous dictator/tyrant, (of course, a good degree of this fame springs from propaganda) and more importantly, he is a Muslim dictator/tyrant. Muslim dictator/tyrants are currently held in poor esteem by the American powers-that-be, especially ones that we have invaded in the past and hence might be a bit (just a bit) adverse to us. The problem is America can't be expected to police the entire planet. It's a two-edged sword. When we go into Kosovo and Somalia and try to depose despots, people complain that we're violating national sovereignity, but when we ignore potential threats, people complain that we're isolationist and short sighted. Really, the only solution is to deal with the guys who are the biggest threats NOW, rather than hope to make the world an oppression-free utopia. Such a dream is more or less impossible, and if America tries to fulfill it, I expect it will find itself as the oppressor.
"2) because their leader's troops killed many people with biological warfare. I don't like that at all either!
but in the 20th Century our country never toppled the Japanese, Chinese or Nazi regimes while they were killing far more folks until after they came after us! We never went after the regimes in SE Asia or
South America or Central America who were making people disappear by the thousands."
True, but it's a different world now. America now has the power (and the technology) and the superiority (political, military, and cultural) to afford to go after banana-republic dictators. But bear in mind, we have to be practical and pragmatic. We can't send in the troops in every country with some half-bit dictator running around, we'd go bankrupt, and be hated universally for being bullies. We have to choose our battles.
"3) because their leader's troops attacked Kuwait, which was part of Iraq until British divided it.
But when Communist China recently over-ran Tibet, our military response was zilch."
We also have to pick battles we can win. :) War with China would be bad. Very very bad. Unless they do something openly dastardly (ala a Pearl Harbor style strike or Tibetan concentration camps) we wouldn't pick a fight with a nuclear power, particularly a nuclear power with an near-infinite population (you guys say nothing physical is infinite, but China gives infinity a reeeaaal run for its money) since WWIII would result. What we're doing now (maybe) is trying to stop a hostile power from eventually become a hostile nuclear power.
Saddam Hussein + Thermonuclear Weapons = AAAARRRGH!
"4) because they are trying to develop weapons of mass and self-destruction. But U.S. regularly talk with other Asian nations who have H-bombs...and didn't keep them from developing the weapons."
Sure, because we're afraid of nukes, and if we had our way no-one else would have them. But again, we can't just walk up to every nation's doorstep with a million soldiers and tell them to hand over the nukes. We're not a world dictatorship. We just have to deal with the biggest threats as they come, and as far as potential threats go, Iraq is pretty high on the list.
"5) Because Iraq is not a fundamentalist religious nation.... Uh... I can't think of a counter example for that one. In fact, our president's political base, fundamentalist Christians and mysteriously conservative brown persons, has recently been building stronger ties with findamentalist Muslim governments who make their women wear veils and won't let women learn to read."
No comment on this one, I'm getting writer's block.