These are seemingly hard questions when looking at the surface of them, but when you think about them carefully, you will find the answer. Anyway, free will means non-interference by God. God judges us ultimately because of OUR decisions. He gives us free will, and we decide how to use it. Another way to look at evil is to again consider the small scale and big scale.
Evil is evil whether on a small or big scale.
Even with this considered, it is sometimes hard not to wonder if God should interfere with evil things that affect so many people, such as the Holocaust. Suffering is allowed for the same reason evil is, free will, but it is also a test of our faith in God. Suffering helps us grow stronger and makes us put more faith in God. Of course, God is all that really matters. Yahweh is a mass murderer.