RE: Everything is permissible but not everything is beneficial

It's Christmas day and I'm sitting in my room with the door shut sipping Diet Coke. Most Christians on this day are remembering the birth of Christ, reminding EVERYONE and their grandmothers that Jesus is the reason for the season. And He is. He really is.
However, I think I've read one too many Facebook statuses complaining about how people say Happy Holidays instead of Merry CHRISTmas. After all, Jesus is the reason for the season. So instead of thinking about the birth of Christ (which I maybe should be doing), I am contemplating all the reasons I don't understand Christianity.
I consider myself to be a Christ-follower and if someone asked me, for identifying purposes, I consider myself a Christian.
I do not consider myself a religious person, however. I think of religious people as those who stand on the street corners telling everybody that they're going to Hell. In my humble opinion, that is not the way to show God's love. After all, Christianity is not a religion...it's a relationship. (insert more cliche sayings)
But most people think of Christianity as a set of rules. You MUST read your King James bible for at least a half hour every day, pray, give to the poor. You may NOT drink alcohol, buy lottery tickets, smoke, read Harry Potter or Twilight, cuss, listen to secular music, have fun.
Actually, I am convicted about a good majority of the things that I listed that you may not do. I have watched alcohol ruin lives...I think that gambling is a huge waste of money...smoking is gross and horrible for you (so is Diet Coke, I'm sure)....I think that opening yourself up to Harry Potter is entertaining witchcraft. I have known people heavily into the occult and I can tell you that even though Harry Potter is technically fictional, witchcraft is very real and we have no business entertaining it. Twilight is pedophilia and a shame to any well written novel. I hate when I hear Christians cuss all the time.
I am not convicted about listening to secular music but content does matter.
Most Christians I know don't think of these things as a big deal but I do. I don't think that saying Happy Holidays is a big deal but apparently it is. Where do we draw the line about what's right and what isn't? I understand the concept of conviction but as Paul said in one of his letters, everything is permissible but not everything is beneficial. However, do these things that we do ruin our witness to other people? Why do we spend more time trying to justify the things that we're doing instead of reaching out to people and being a Christlike example? I don't really know if any of the things I listed are technically wrong but I have seen those things ruin witness to those in the world. Seriously, where do we draw the line!? I DON'T UNDERSTAND.