Everynight is not a word! Even if it were, it would be an adjective, not an adverb, so it still wouldn’t work to describe when something happens.
The pronouns are unclear in the second sentence; you’ve got more than one they/them referring to different things. Changing the second they to the stories (replace the pronoun with its antecedent) will fix that well enough.
Change the dash after true to a comma.
Every night she told the best, most creative stories of heroes and villains. Little did they know that the stories were all true, and that she had lived through them all.