"Fight and struggle, if be thy will." and "Man hath ever coveted that which lieth beyond his grasp." does NOT sound like he is testing you, it sounds like he has already judged you. Nothing in the English version suggests he is testing you, everything points at him seeing you as an enemy and not having any doubt about it.

Important things are omitted from the English version. With some people's amount of "read between the lines", they could just as well defend the conclusion that Midgardsormr has a crush on the player.