Here’s a semi-brief thought on the matter, fueled mainly by religion (which means don’t take this too personally, these are just my beliefs according to my religion):
It is my belief that there most definitely good and evil. God has created the world, but He included both good and evil for a reason (evil originating from Satan, not God, just so we’re clear). The reason that there is a clear good and evil is so that I get to have a choice between good and evil, and get to have the agency to choose. Through my decisions, I learn, and I grow. When I choose evil, eventually, perhaps after the initial temporal happiness, I feel pain and sorrow. When I choose good, though I may not be immediately blessed, I do feel happiness.
How I come to understand good and evil is through what I believe to be the light of Christ and natural man, both found within everybody. Similar to how in Mistborn all the inhabitants have a small piece of Preservation and a small piece of Ruin inside of them, I too have conflicting forces of good and evil within me. Whenever I do something good, such as service for somebody, I can feel a clear and definitive joy, clean and pure, and that typically lasts the rest of the day. That is the light of Christ found within me. Now say that I indulge myself, say maybe choose to rob a bank because I feel like getting some money to buy a fancy car. Though at first I’m sure to feel some initial happiness, I will eventually feel wrong, and sorrow for the actions that I have done. The happiness won’t last, and I’ll know that I have just gratified the natural man. How I become either righteous or wicked depends on which feelings that I act on. Even if you don’t believe in that, it still goes to say that most people have the same sense of morality; like most people aren’t going to murder someone because they feel that it is evil, and most people are probably going to help an old lady up because they know it’s the right thing to do.
Now, there is some interesting gray area. Like you said FT, if a five-year-old stole a cookie, it wasn’t his intention to do any evil. He still retains his innocence, and can literally do no true evil because he doesn’t have a full understanding of his actions and its consequences. But say when he’s twenty and steals a car, it is my understanding that like you said, he is choosing evil. He has, in exchange for growing up, lost his innocence, and now knows exactly what he is doing.
That’s my two cents on the matter anyways.