This lesson has also the phrase «Кинотеатр находится около реки». The structure looks similar to me, is there any reason for them to be different or they can be used interchangeably?
Katzner's Russian-English dictionary defines около as "near, close to" and рядом с + [Instrumental Case word] as "next to, beside, alongside".
Things that next to other things are certainly near each other, but things that are near other things are not necessarily next to them. For example, the buildings built around a city square are next to and thus near the square, but buildings built one street away from the square are near the square, but not next to it.
So, simply based on what seems to be clear definitions by a reliable source, I'd say that they are not interchangeable.
Of course, common usage can change that conclusion, but that wouldn't be the first time a seemingly incorrect translation or usage was accepted simply because everybody uses it.
How about "along the river?" The translation I was given is "against the river." No one would say that.
"Our district is located alongside a river" translates as "наш район расположен вдоль реки". "Вдоль реки" means that the longest side of the district coincide with the river bank.
"Our district is located alongside a river" was marked wrong, yet "alongside" pops up in my dictionary (Oxford) before "beside" and "near." Odd.
It should be accepted. Report this next time you will come across this task.