God and Evil

"Did God create evil?  If so, why?"

Good and evil are inherent.  In the abstract, they simply exist.  Many things exist without the need to be created.  For instance, no one had to create integers (whole numbers).  No one had to create "truth" or "honesty."

God did create beings that have the ability to choose to do evil or good.  He did this because He wanted companionship.  However, like us, He wants to be freely accepted.  He wants people to accept Him as He is, without trying to change Him.  After He created man, God hung around with Adam and Eve on a regular basis (cf. Genesis Chap. 3), and once He has created a new Heaven and a new Earth that have never been polluted by sin, God will again "hang around" with those who freely accept Him. (Revelation 21:3)
 

"The Bible says that God loves everyone, even sinners.  So why should I be worried about Hell?  I'm sure that, in the end, He'll save everybody."

This is a common heresy (false teaching or false doctrine) called universalism.  Do not be deceived.  The Bible makes it very clear that the angels who rebelled and all unrepentant sinners will be punished forever.

Jude 5-7 [5] Though you already know all this, I want to remind you that the Lord delivered his people out of Egypt, but later destroyed those who did not believe. [6] And the angels who did not keep their positions of authority but abandoned their own home--these he has kept in darkness, bound with everlasting chains for judgment on the great Day. [7] In a similar way, Sodom and Gomorrah and the surrounding towns gave themselves up to sexual immorality and perversion. They serve as an example of those who suffer the punishment of eternal fire.
 

2 Peter 2:4-9 [4] For if God did not spare angels when they sinned, but sent them to hell, putting them into gloomy dungeons to be held for judgment; [5] if he did not spare the ancient world when he brought the flood on its ungodly people, but protected Noah, a preacher of righteousness, and seven others; [6] if he condemned the cities of Sodom and Gomorrah by burning them to ashes, and made them an example of what is going to happen to the ungodly; [7] and if he rescued Lot, a righteous man, who was distressed by the filthy lives of lawless men [8] (for that righteous man, living among them day after day, was tormented in his righteous soul by the lawless deeds he saw and heard)-- [9] if this is so, then the Lord knows how to rescue godly men from trials and to hold the unrighteous for the day of judgment, while continuing their punishment.
 

"Why doesn't God just destroy people who don't accept Him, instead of punishing them?"

Does it matter?  He has told us He rewards those who accept Him and punishes those who don't.

Mark 16:16 Whoever believes and is baptized will be saved, but whoever does not believe will be condemned.
 

John 3:16-18 [16] For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life. [17] For God did not send his Son into the world to condemn the world, but to save the world through him. [18] Whoever believes in him is not condemned, but whoever does not believe stands condemned already because he has not believed in the name of God's one and only Son.