Kaiser Wilhelm gave Austria-Hungary assurance that Germany would back AH given any circumstances, and was even willing to risk war with Russia through an agreement known as "The Blank Check", which gave Austria the confidence and comfort to safely declare war on Serbia without overextending itself. So, yes, German administrators and military leaders were rearing themselves for war, as most every other European country was, following the Scramble for Africa, with Nationalism and Militarism at an all-time high. Archduke Ferdinands death gave Europe its excuse for a romanticized war to test their mettle against eachother.

What resulted was, of course, one of the largest losses of life ever seen and a vicious snap back to reality for much of Europe as the horrors of war were once more unleashed.

http://www.history.com/this-day-in-history/germany-gives-austria-hungary-blank-check-assurance

http://africanhistory.about.com/od/eracolonialism/a/ScrambleWhy.htm

If you're interested in a great book on the leadup to WWI, I highly recommend Michael Neiberg's Dance of the Furies. It overturns most of the conventional wisdom about the subject by reading newspapers and other primary sources from before the war. In short, nobody expected something like WWI to happen, and if there was any conflict, that it would be limited to the Balkans.

It's really easy to come in after an event and claim "everybody knew" something was going to happen, but his book pretty thoroughly documents that even a week before the start, there was no notion it was going to happen. The English and German navies were conducting joint operations together, for example.

The Kaiser had a reputation as a peacemaker. As long as lines of communication were open between him and the Tsar (a relative of his, IIRC, who had led a disarmament conference in 1898) the citizens believed everything would be fine. Since people tend to pass out downvotes like candy when saying this, I'll quote the book:

The British newspaper the Forum praised him in 1903 for "stemming the rising tide of national bitterness."

The Kaiser believed his son was a war monger, and openly worried that Europe would be plunged into war after he died. He said as long as he was on the throne there would be no war.

Andrew Carnegie called the Kaiser an "apostle of peace".

A German newspaper criticized the Kaiser for having "no warrior spirit" who was "firm in his will for peace". Germans claimed he had overwhelmingly "peaceable intentions".

Baron Beyens, the Belgian (irony) minister to Berlin wrote that while Wilhelm enjoyed the company of military men, he was not himself warlike. "He does not possess the martial spirit inherent in several princes of his house". He was "fond of the barracks, without having a taste for the battlefield."

American reporter Maurice Low wrote in 1906 that the Kaiser (who had just negotiated an end to a crisis in Morocco, which France ended up violating in 1911) was "essentially a man of peace." And went on to say that when the histories of the period are written, "Wilhelm will go down as one of the positive forces of the age."

And so on and so forth. While there were elements of German ultranationalism pushing for war, they were more closely aligned with the Kaiser's son rather than the Kaiser.

It's an unfortunate reality that our history textbooks all seem to get this wrong, and portray him as a bloodthirsty villain.