Isaiah is among the more difficult Hebrew books to understand because of its advanced usage and extensive poetry. Its study is reserved for higher levels of Hebrew, and I may not understand it fully myself. However, the grammatical notations of an interlinear can help us to see that its translation to English has not captured the Hebrew meaning perfectly.
Notice that the first word is not actually saying "I form" here: it is in the form of a participle. A more consistent translation might be "forming." The word has no pronominal suffix, and no personhood. Notice also that the verb "create," from the root "bara" (which is reserved to strictly God's creations throughout the Hebrew Bible), is in participle form, i.e. "creating." The "I make," from the root "asah," meaning to create, form, fashion, do or make, is also in participle form, i.e. "making" and the "do" is a participle, i.e. "doing." In fact, there is not a single explicit verb in this text which is
not a participle. I must say "explicit" because there is one implicit verb--a nominal sentence--formed by the expression "I Yahweh." In Hebrew, pronouns are considered "most definite," and names are "definite." A difference in definiteness between nouns or pronouns forms a
nominal sentence whereby a verb of being is implied. For a similar example, consider the "I am Joseph" of Genesis 45:3.
Consider the following re-translation of this text:
"Forming light and creating darkness, making peace and creating evil, I am Yahweh, doing all of these."
Now, the Hebrew word translated as "evil" is broader in Hebrew usage than we might accept in English by this translation. It covers a range of concepts including bad, evil, calamity, distress, injury, pain, adversity, misery, or unhappiness.
Two salient manners of reconciling these concepts with a loving God are as follows:
1) God "creates" the misery, unhappiness, pain, or "evil" for someone in much the same way as His hardening of Pharaoh's heart; i.e. though Pharaoh hardened his own heart, his heart's hardening was motivated by his resistance to God--and God accepts that He was the causative factor in the process.
2) An entirely different approach to understanding this passage would see God as "creating" evil by virtue of defining it. It is God's law which establishes what is evil and what is not, and God is here taking credit for having divided between good and evil, creating both categories, though not doing evil Himself. The initial reference to light and darkness gives a large clue to this as the proper context because in Genesis 1:4 God plainly declares that He "divided the light from the darkness."
I incline toward this second interpretation; but one beautiful aspect of the Hebrew language is that it allows more than one interpretation, and God may impress each reader with a message fit for that individual. It is important to remember that without the Holy Spirit's help, we can have no confidence of understanding God's Word correctly.