But did they truly know that what they were doing was "wrong"?...To them, it was two beings telling them to do opposite things. They couldn't distinguish between the motives of both, so it seems like they simply did what was most recent.

Eve knew that the being who gave them all they possessed said no to the tree, and the snake's first statement was incorrect. (Which actually was pretty sly) She had reasoning ability as evidenced by her properly correcting the snake's first question. Despite all that, she still was tricked or deceived. Nonetheless, she chose to act on her own, not even asking Adam or Yahweh, and to knowingly disobey the being that gave her everything.

Another part of the Bible says while Eve was tricked, Adam was not fooled (1 Timothy 2:14) Adam was able to compose poetry (Genesis 2:23) He created names for animals. (Genesis 2:19) Interestingly, it is Adam's sin that the Ransom pays for. (Romans 5:15, really the whole chapter)

They realized, then, that they had done the "wrong" choice, which is why they blamed each other.

Instead of admitting their fault or apologizing, they first hid and then proclaimed how they were innocent. Evidence of not being repentant.

Since we are speculating on events, notice the order of events. First Yahweh calls for them, they eventually answer, then he asks them 'what's going on, what have you done?' next they avoid taking responsibility for their own actions and shift blame and finally he passes judgement and says 'get off my lawn'! Maybe if they had apologized and accepted blame, things would have turned out differently. (utter speculation)

Also, God is supposed to be omniscient. He would have known prior to telling them what their choice would be.

Not how God's knowledge is described in the Bible, at least when it comes to a human's choices. (Deuteronomy 30:19,20) (Genesis 4:6,7)

He could have destroyed the serpent before anything like that happened

Pre-crime? Kill Satan (Revelation 12:9) before he actually commits a bad act?

or he could have not overreacted to the single action. If being in direct defiance of what your God commanded always led to punishment like that, humanity would have been wiped out before the first week was over.

He gave them one restriction and they knew the punishment. (Genesis 2:16,17 and Genesis 3:3) He reacted like he said he would. Regarding the progeny of Adam and Eve, they were not able to fully control their situation or actions. Hence Yahweh's patience and help. (2 Peter 3:9; Isaiah 48:17,18)