Cursing?

On top of all the other great points people have raised here, an important one to me is that: the VILLAIN says this!
There's an unspoken concept in film-making that if you make a villain do something that is considered bad, it'll teach younger children that it's a bad thing, as well as show older children that they're the villain for doing it. For example:
Kent swears towards the end of the film. By this point he's been established as the villain, so if he swears, then it's teaching kids that swearing is what bad people do, as well as proving to older kids that understand that concept, that this guy is definitely the villain.
It's the same idea as smoking in old crime movies. The villains were always smoking, because smoking was harmful, ergo, a bad thing. The heroes never smoked, and so people thought 'smoking = bad guy', and also 'bad guy = smoking'.

I think the cursing was to add in an element of realism to the story. Whether you agree with it or not (I don't think it's a big deal or creates much of a difference over all) the Iron Giant was made at a time in which PG movies had stuff that be considered mildly or moderately offensive. Now PG is pretty much the same as a G rating but with flatulence.

I'm hoping the IMDB boards become archived because even though there's terrible trolls there's also intellegent posters like Ecarle that I will miss when the boards are removed.

I only recall Harry Connick's character saying Hell lol

This isn't a movie aimed at toddlers. The rating is PG, which indicates that parental guidance is suggested. As in, parents should screen the movie first and determine whether it's appropriate for their own kids or not. What does the praying scene have to do with anything? Not everybody has the exact same beliefs as you. Again, you should watch the movie first and see if it's okay for your kids or not.

The Iron Giant is rated PG. It's not aimed at young children but older kids and adults.