"It is unknown if many people knew how to read then."
Translation:Неизвестно, много ли людей тогда умело читать.
There are at least good thread responses. I'll try to come back with a link. I see you're Russian level 16 now but it would probably be helpful here anyway.
ли follows whichever particular you are expressing doubt about. Be it verb, adjective, or noun. If the whole phrase is necessary to describe a situation you are in doubt about then если is used where you would put "if" in English. In this example it is assumed that at least some people knew how to read 'then' so the question is just how many: много ли.
Sorry, I don't know. I can only say that "много" means a large quantity in absolute sense, and "многие" means a large quantity as a part of some group. You cannot use "многие" with uncountable nouns.
У меня много книг. Многие книги очень старые. I have a lot of books. Many of the books are very old.
У меня мало ручек. Многие из них к тому же не пишут. I have a small amount of pens. Besides, many of them won't write.
However, in this task both forms will do, I think. I.e. "много людей тогда" = "a lot of people at that time", "многие люди тогда" = "many of the people living at that time".
Like Онфим! I just found - and loved - this story yesterday, about medieval literacy: https://lithub.com/onfim-wuz-here-on-the-unlikely-art-of-a-medieval-russian-boy/