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Lit., "We could indeed have given unto every human being (nafs) his guidance", i.e., forcibly: but since this would have deprived man of his ability to choose between right and wrong - and, thus, of all moral responsibility - God does not "impose" His guidance upon anyone (cf. 26:4 and the corresponding note).
See 7:18 as well as the last paragraph of 11:119 . As regards the "invisible beings" (jinn), see Appendix III.
Could evil have been avoided? Certainly everything is in Allah's power. If it had been His Will and Plan, He could have created a world in which there would have been no choice or will in any of His creatures. But that was not His Will and Plan. In the world as we see it, man has a certain amount of choice and free-will. That being so, He has provided Signs and means of instruction for man, in order that man's will may be straight and pure. A necessary corollary will be Punishment for the infraction of His Law. That Punishment must come to pass, for Allah's Word is true and must be fulfilled.
Cf. xi. 119. n. 1623, and vii. 18, and see last note. Jinns are the evil spirits that tempt men, and the men who will suffer punishment will be those who have succumbed to their temptations.