The verb endings change depending on who does something (I, you, he/she/it ...). In addition, "essen" is an irregular ("strong") verb. Like some other irregular verbs, it changes its vowel for the "du" and "er/sie/es" forms in the present tense. Here, the vowel change is from "e" to "i", so it's "du isst" and not "du esst", etc. Unfortunately, the vowel changes of irregular verbs have to be learnt by heart.

essen (to eat)

ich esse

du isst

er/sie/es isst

wir essen

ihr esst

sie/Sie essen

Because "er" means "he", not "she" (sie).

Actually, according to the new spelling rules, it isn't, or rather, it's dated :). After short vowels, "ss" is now used instead of "ß": daß- dass, ißt-isst, Kuß - Kuss, etc. But maybe Duolingo still accepts the old spelling.

If anybody is wondering why we're having this discussion: the spelling reform is a fairly recent development (1996-2006).

The English progressive aspect (e.g. she is eating, he is reading, I am cooking) can't be translated literally into German. In fact, Standard German doesn't distinguish between the simple and the progressive aspects - there is just one form for both. So, depending on the context, "Sie isst" can be translated as "She eats" or as "She is eating/She's eating".

(In addition, in some regions in Germany there is also a special progressive form that is used in colloquial speech. I think Duolingo accepts it, but I would advise against using it. This colloquial progressive form, too, is not a literal translation from English: She is eating = colloquial progressive: Sie ist am Essen.)

esse is the form where before it is Ich which makes am eating or eat into esse, when sie is before eat or am eating it will be isst.

also trinkt is drinking...

The form of the verb following 'Sie' tells you which is which...