I wonder if it would help to think of the anecdote of Edison when working to invent* the light bulb. The anecdote is that it took him 1,000 tries to invent it. When he was asked whether he felt like a failure for the first 999 unsuccessful tries, he replied, "No, I just learned it was a 1,000 step process."
The light bulb filaments did not go on out of niceness just because Edison was close to being right. And, because of that -- because he was continually met with something that would not yield until he had mastered it -- he learned he had to change what he was doing if he wanted to get an answer that worked.
I think these students need the same experience. It might help, though, if you think of it as part of their learning curve (step #453) rather than the end of their academic careers (I exaggerate, but you know what I mean). They need to see that they have to do something different in their approach -- read the directions and answer the question that is asked -- if they want their answer to succeed.
So, I would be polite and kind, but firm. You might even say, "I can see that you've done a lot of work here, and I wish I could give you credit for it. Unfortunately, it doesn't address the issue you were asked to discuss. I appreciate the info you gave me, but it doesn't tell me anything about your level of understanding of XXX. I can't take it on faith that because you understand YYY, you also understand XXX, unless I see that understanding on paper."
VP
*Yes. I know he did not technically invent it. And, how likely is it that it took him exactly 1,000 attempts? Just go with me here, people.
Sorry for quoting all of this, but I absolutely love it. I am going to use this with my students. All my students. Every semester. VP, THANKS! (Yes, I meant to use all caps there!)