A child has free will, but there are punishments if they do the wrong thing after they are told not to do it. Unless of course you have a child and you don't believe in punishment. In that case, you're just a horrible parent who's raising a brat. God is perfect, therefore he doles out the perfect punishment.
The Bible says that all are worthy of eternal life in hell, but through His grace we are saved from that eternal hell. Everyone who repents and asks God for forgiveness of their sins will be spared.