@William,
The RAMBAM brings an interesting question in his book "The guide for the perplexed". He asks what is the difference between God's Knowledge and the Knowledge of Man.
The answer is as follows. For man, there is the Knower, the Knowledge and the Known. For God, He is the Knower, the Knowledge, and the Known.
The Great Kabbalist the Holy Ari Brings a concept called Tsim-Tsum. He states that God's Perfection is so dense that in order to create the world He had to make room within Himself. Tsim-Tsum litterally means Contraction.
The RAMCHAL who died at the age of 40 and wrote over 25 Kabalistic works and memorized the entire Babylonian Gemara and Jerusalem Gemara (It normally takes 7 years to read just the Babylonian Talmud and that is if you dont go into too much detail.) by the age of 18 writes as follows.
"Within the Limitless perfection, all states of all things are present simultaneously in every possible combination."
The fact that we can teach the Limitless anything is laughable.
I will now answer the 3 questions that I asked you.
1. Did God Create man?
There is a concept called "Sof Maaseh" which means the final state. When looking at the earth we see things occuring in order from begining to end. When the Limitless created the earth He looked at the end. Just like when you write a story or paint a painting, you have some idea of what the end would look like before you start. For the Limitless it is the same. The Limitless knew exactly what he was creating and created a world based on the end goal. "The final state is first in thought". When the Universe was created, it was created for the Final state. Thus from the point of view of the Limitless, it created Man before it created the universe because Man came later, it was closer to the Final state. But from our perspective the Universe was first created and as a result of evolution Man came about.
2. Why did God Create Man?
The Gemara answers the question. The Limitless perfection need not create a thing for it is perfect and needs nothing. But none the less it is the quality of Goodness to want to bestow of this Perfect Good to a recipient. And the RaMCHaL adds In the best possible way.
Thus God created Man in order to have a recipient to receive and understand his Goodness and Perfection.
3. Why did God give man the ability to do Evil.
The RAMBAM writes that the ability to do Evil is part of Free Choice. In order for us to have free will we must have the ability to do both evil and good. The Torah itself writes "Chose Good".
The RAMCHAL writes that the Limitless left the world imperfect so that He could give of his perfection to a recipient. Because something that is perfect cannot be perfected.
Please read the Miracles thread in the Metaphysics section. The RaMChaL brings how The universe is like a body and the The Divine Will resides in it as our soul rides in our own body.