A priest can give you atonement for a sin. He can not give you forgiveness for a crime. You still face judgement under the law. They are not mutually exclusive.

But don't you think, at least as a Catholic, it is hypocritical to believe in an extremely merciful God while supporting laws that criminalize people for life? If God forgives and forgets, shouldn't we?

Jesus was clear, "Give unto Caesar that which is Caesar's. Give unto God, that which is God's." Even those forgiven by God, are still subject to judgement by man. And as for forgiveness, it is desirable to forgive for both the offender and the victim's wellbeing. But, it is not usually possible, nor desirable, to forget. Lessons learned promote growth. As a victim, I may forgive you for murdering a loved one, but I will never forget. And my forgiveness does not eliminate your debt to society for breaking norms and laws.