The backspace is unable to erase the characters. The navigation keys produce alphabets.
Can anyone tell me how to fix this?
Vi (or Vim) is a very powerful editor but it's not intuitive. It is modal in operation
What you are experiencing is normal.
If you want to learn Vi there are several tutorials available such as this one
However there are other editors available. I suggest you use nano, it's not as powerful but is a lot more intuitive.