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It was likely a parable.
Lk 16:
Why was the rich man being tortured in Hades?
Just because he did not listen to Moses (v. 31). But Moses didn't spell out the punishment of conscious eternal punishment in Hades/Sheol.
Why was Lazarus blessed at Abraham's side?
Just because he was poor?
Did Jesus describe a historical story that had transpired already?
No, a rich man would not be tormented in Hades before Judgment Day.
Matthew 13:
Similar parables were told by rabbis around Jesus' time. Wiki:
What is the lesson of the parable?
Abraham said to the rich man:
Lk 16:
The rich man in Hades saw Abraham and Lazarus in heaven. That's not physically possible.22 The poor man died and was carried by the angels to Abraham’s side. The rich man also died and was buried, 23 and in Hades, being in torment, he lifted up his eyes and saw Abraham far off and Lazarus at his side.
Why was the rich man being tortured in Hades?
Just because he did not listen to Moses (v. 31). But Moses didn't spell out the punishment of conscious eternal punishment in Hades/Sheol.
Why was Lazarus blessed at Abraham's side?
Just because he was poor?
Did Jesus describe a historical story that had transpired already?
No, a rich man would not be tormented in Hades before Judgment Day.
Matthew 13:
The rich man story was part of a series of parables in Luke 15–16, which include the parables of the lost sheep, the lost coin, the lost prodigal son, the almost-lost dishonest manager, and the lost rich man. This was Jesus' MO of storytelling to teach moral and spiritual lessons using parables.34 All these things Jesus said to the crowds in parables; indeed, he said nothing to them without a parable.
Similar parables were told by rabbis around Jesus' time. Wiki:
It was a parable of fortune reversal. In life, Lazarus begged at the rich man's house. After death, the rich man begged Father Abraham to have mercy on him. It was intended to teach spiritual truths rather than provide literal happenings in the afterlife.
What is the lesson of the parable?
Abraham said to the rich man:
Respond to God's word while we have the opportunity. Do good when we can before we cannot. Care for the poor in your neighborhood. Our earthly choices have eternal consequences.31b ‘If they do not hear Moses and the Prophets, neither will they be convinced if someone should rise from the dead.’