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Does the invited person need to create a password?
Short answer: No. The invitation link signs them in directly. For later visits they can have a sign-in link emailed to them, or set a password whenever they want.
Signing in on later visits
From the login page, two routes, whichever they prefer:
| Route | The button |
|---|---|
| Get a login link by email | Email me a login link |
| Choose a password once and for all | Set my password |
Either way an email goes to their address: they have nothing to ask you for.
The password belongs to the person, not to the account. You never see it and never have to supply it.