Why not rejon? or okolica? for region...
ten region jest na pólnocy kraju - was marked wrong with pólnocy in red - I don't see any error
północy (ł instead of l)
Dlaczego nie "leży"?
Może być "leży", dodałem.
Why not "ze kraju"?
"Ze kraju' doesn't mean anything in Polish. What did you have in mind with this question?
"z kraju" would mean "from the country", but there's no reason to make it "ze", "z kraju" is perfectly pronouncable.
Ten region znajduje się w północy kraju?
Ok, added "znajduje się". However, with compass directions the preposition na is used.
"tego kraju" as an option?
OK, interpreting "the" as "this" is always allowed in this course (apart from rare situations when it's nonsense), so I will add the possibility to do it here.