What's the difference between hier and da?
Generally speaking, "hier" = here (at a place close to the speaker); "da" = there (at a place far from the speaker).
Though sometimes "da" is used for "here", as in "Ich bin schon da" (I'm here already), in the sense of "present".
Would 'Wir wohnen da' do?
It's grammatically correct but means "We live there" rather than "We live here".
Why we reside here is marked incorrect?!
wie wäre es mit "we stay here"?
That would be Wir bleiben hier.
Shouldn't it be "Wir hier wohnen"?
No, of course not - the verb goes in the second position in a normal sentence, i.e. "Wir wohnen hier" or "Hier wohnen wir".
what is wrong with wir leben hier?
In a listening exercise, you have to type what the voice says.
Pronounce is not correct.