Application to Israel: The Lord makes his position concerning Israel clear. They do not deserve his merit but rather his anger, yet the Lord stays that anger and continues to strive with Israel. The Lord is the ultimate in loving parents, and even when his children are willfully rebellious he loves and cares for them.
Victor Ludlow uses the New Jewish Version of Isaiah for comparisons, and the rendition of this verse has some important differences from that in the KJV:
The changes that are significant are the emphasis on the the name, and the use of the word "glory" rather than the "praise" used in the KJV and the Book of Mormon. The emphasis on the name places the import of this verse squarely on the divinity of the Lord. Because the Lord is known by his sacred name in the Old Testament, this usage provides an identification between the ultimate speaker (through the mouth of Isaiah) with the God of Israel (who certainly has the right to such pronouncements).
The second difference is the word "glory." While it can easily be seen how both praise and glory might fit with the sense of the statement, glory is a more significant word (and without the possible selfish implication of a God who acts to receive praise). Note the use of "glory" in Moses 1:39:
In this verse the immortality and eternal life of man are equated with the glory of God - they become the definition of the glory of God. It is in this sense that we can best understand God's statement to Israel. God's retention of his wrath is to further his purpose in exalting the children of Israel (which in turn becomes the glory of God). Thus a phrase that might seem self-serving or egotistical ("and for my praise") becomes a powerful statement of the ultimate mission and desire of God.
Application to Nephi's audience: Just as with Israel, the Lord has not yet ceased to strive with and care for the rebellious of Lehi's children.