"The children are outdoors."
Translation:Дети на улице.
"на улице" does literally mean "on the street" but it is also the most common expression used to mean "outdoors" or "outside" even when no streets are involved.
As a native speaker I believe it should be accepted also. There is a very slight difference in style and ребята can really be used more widely for teenagers and young adults and between friends and just like an equivalent for 'guys', but it is commonly used for children as well, so it's not really incorrect.
It's been a while since University, but I believe "ребята" means something closer to young people (as in adolescents, or young adults), but that may be picking at straws.
When do you put a hyphen as the verb "is"? Is "Дети - на улице." accepted?
Here can be used a long dash, but not a hyphen (that is only used inside a word). There are many cases when you can or must use a long dash, here it is optional.
Please note that a hyphen a short dash and a long dash are three different things. In this case a long dash can be used, but it's optional and there is no real reason to put it here without any context.