Many good points and questions!! Regarding npc's: I think there is a qualitative difference between the phase appropriate narcissism of a child and the psychopathological narcissism of a biological adult.
Regarding: Do they have a soul? I often wondered about this. You could hang out and play with a lion and one day it just might kill you. We would not consider that evil. FWIW I remember Gurdjieff on the subject of essence as distinct from personality where he mentioned that there are humans walking around with "dead essence" which operate out of instinct no different than an animal.
I've read some Gurdjieff too, and it puts the willies up me to think that some people might be, effectively (relative to the rest of us), zombies or "biological robots in a meaningless universe" to quote the phrase of our host.
Were it true, then I think it'd be more likely we were living in a simulation and that some people were indeed NPCs. Heck, the Abrahamic tradition paints a picture of a God who creates us, may predetermine our every life action (particularly for Muslims), and can't really give a tinker's toss about us as individuals.
That one individual is a hero and another a villain would be an arbitrary choice of the designer of the game. It seems to me that such a God would have designed the universe as a distraction for Himself, maybe to stave off some kind of boredom. It's my understanding that Muslims believe God can do anything He wants, including sending a righteous person to hell or, exercising mercy and forgiveness, an evil one to heaven. All one can do, in essence, is obey the rules and cross one's fingers.
The fly in the ointment is free will. If it exists -- and most of us would say it does -- then it's incompatible with predestination. Does an omniscient creator know everything that is going to happen, even though we have free will? Hard to wrap your head around that; I tend to the view that any creator, though immensely powerful, probably can't be omniscient or omnipotent and is, like its creations, capable of evolving into an "unknown future" as it were. That would be, for it, the goal of creation: to evolve and uncover more of its own potential.
It isn't necessarily that good is intrinsically better than evil; could be more that good is more efficient and effective in achieving a creator's aims through us, it's dissociated alters (to use Bernardo Kastrup's metaphor). I think it makes a certain amount of sense, because being evil is a particularly inefficient way to evolve and learn. I suspect that had we dissociated alters universally inclined to evil, we'd have annihilated ourselves long ago and any creator wouldn't have stood a chance of achieving its goal.