«вот» is wrong here because it's specifically drawing attention to something. It translates almost exactly to "here is," as in "here is my bicycle" or "here is your car." It's a word used to present something.
«вот» (as in «вот моя улица») would be used to mean, "here is my street," as if you're showing your street to your friend.
In this case, with "my street is here," we're just specifying its location. We're not really showing it off or drawing attention to it, just saying "yeah it's right here, this is my street." Since we're talking about where it is and not the street itself, we use «тут» or «здесь».
I have always used вот for "here" as in "here it is" and тут for "there it is" when pointing directly at something, (I am an advanced Russian speaker who travels in Russia a lot.) . Duolingo said I got the wrong answer with "My street is there." But Google translate gives both "here" and "there" as the first two translations of тут.
It was the same for me, but I saw the word in the box before starting the exercise, so I got it right, even though I didn't know what it meant yet...
BTW, I always read all the words in the boxes before starting a new lesson, simply because I noticed that sometimes not all new words actually show up when doing it for the first time. That way I can look them up if I didn't encounter them, so I won't be surprised when they show up later and Duo assumes I've practiced them already. It's come in handy more than once. :)