I remember one brother bringing out in a talk once that when a shepherd "uses the rod" it is rarely to beat the animal, but rather to guide it in the correct direction, so that verse is really talking about gentle correction and not just corporal punishment.

I really like Ephesians 6:4 as well. Actually, my dad had the bible highlights on the Galatians-Ephesians reading a few weeks ago, and when he asked what verses we appreciated about the reading I almost raised my hand to say Ephesians 6:4, but I managed to restrain myself.