So we know that Nobunaga burned Mt Hiei to the ground with the children, monks, and women inside. However, my question is - was this particularly cruel of an act to do for the samurai in this time period? I'm aware that in general, to us, it seems cruel (and is), but there are also instances of other samurai, like Masamune running around and murdering people down to the dogs in castles and sending letters bragging about it, while other samurai are basically burning villages and killing peasants as they go along. So, was Nobunaga's act extremely cruel than usual for the Sengoku period?
I don't think Nobunaga was a particularly kind person. A lot of his acts (especially in the execution of Araki Murashige's whole family) were not taken positively by people of the time. However, his burning of Mt. Hiei wasn't in any way cruel at the time -- because it simply wasn't real.
Wait a second, what? Well, let me explain.
The actual description of the burning of Mt. Hiei was recorded by the Imperial court in Kyoto, stating they could see the burning of this sacred site from across the province (from the Shiga district to Kyoto, which wasn't very far). Now, this all checked out (and thus history was created), but recent excavation studies in the Shiga prefecture had uncovered something else. Through soil studies, the conclusion was that there was no sign of Mt. Hiei being burned during the Sengoku period. So, why did the imperial court lie? Were they trying to frame Nobunaga of a crime he didn't commit because they didn't like him? Well... no. The burning of the mountain was not true, but the burning of neighbouring towns and settlements (where a lot of hired mercenaries lived in) was true. Nobunaga didn't specifically target children, monk, and women. However, they were the unfortunate casualties. Judging by Mitsuhide's letter (commands to a minor lord), at least some Oda retainers knew of the indifferent killing and didn't seem to have an issue with it (at least Mitsuhide didn't).
I think we also need to really think about who were the "warrior monks". They weren't monks turned warriors - oh no sir. Instead, they were mercenaries hired to protect the land of a monk, and thus made into "monks". The reason why a lot of them seemed so brutal and not monk-like? Well, because they mostly didn't give a crap about the monk values or whatever. Thus, the massacre of these people being interpreted as killing innocent, peaceful monks - seems a bit unfair to Nobunaga.
Sengoku daimyos weren't villains, but they sure weren't the nicest people around town. That being said. acts of cruelty performed for the simplistic point of satisfying some sadistic wishes is almost never a thing. Uesugi Kenshin committed massacres, and Konishi Yukinaga and Kuroda Nagamasa committed genocides in Korea. This wasn't to satisfy their bloodlust, but to scare the neighbouring rulers (or in Korea's case, the Korean king) into submission. Your mentioning of Masamune's case was the same. However, these acts hurt daimyos when they performed them. Without the locals, who's gonna farm and make food? without the production of resources and manpower, what's even the point of this land? The Japanese population couldn't simply recover from losing tens of thousands of people at that time - so these acts hurt the daimyos in a lot of ways. Sure these acts seemed cruel even to the samurais at the time, but they understood the purpose of these horrendous violence. As for the commoners... well, they didn't exactly have a voice in this. Plus, sometimes the burning of other villages meant your chance to loot their stuff, so they didn't always hate it.