If "hwnna" translates to "that" (as per other Duolingo questions), why does it have to be "hynny yw" for this question, with "hwnna yw" being marked wrong?
I'd definitely ask one of the contributors since they will probably be able to explain why it is (or I might even be wrong), but I can tell you that "hwnna yw" would definitely be wrong here and so would "honna yw" (along with "Hwnnw/Honno yw"), but I can't for the life of me think why. It might be because Hwnna is the masculine word whereas "Hynny" is more of a general word. Sorry for not helping to clarify, that much.
Hynny does indeed refer to something abstract, and that is perhaps the most common form of the phrase "that is", because if you say "that is to say..." you are not talking about something with grammatical gender. However if you are referring to something with gender, then "hwnna yw" is correct, so report this as "my answer was correct".
hwnna yw ei frawd e = that is his brother
nid hwnna yw e = that is not him
(similarly for honna).
However the team may decide to not accept that answer because you could translate those examples slightly differently as "that one is his brother" and "he is not that one". That is because when you add gender you make the term more personal.
Hynny yw is the one to learn because it gets used a lot.