If the CG is behind the center of lift on the wing then isn't plane laterally unstable? Don't we always fly our planes with the CG forward of, or at, the center of lift, never behind?

The exception being reflexed airfoils used on tailless aircraft.

Effect of CG location is aptly demonstrated by this web page:
http://142.26.194.131/aerodynamics1/...ity/Page7.html

Another question:

The center of pressure of a flat bottom airfiol moves forward when the angle of attach increase. It seems that that will leave the plane out of trim when a gust (with an upward component) hits... potentially exacerbating any tendency to balloon in response to a gust.