"Yesterday he did not play well."
I thought so too and I reported it as also a correct answer.
Why isn't "good" accepted and "well" is?
Although good can be an adverb as well, I am afraid this is not the right context for that.
Does "[ne]hrál" apply for instruments (like playing the piano) as well as a game (like playing a match)?
Yes. When a musical instrument is specified the preposition "na" is used. Games usually are direct objects. When neither is given, such as here, it can mean both, like in English.