"Ils" is plural. Since "he" is singular, "ils" is not an acceptable answer.
"Ils" would be acceptable if it was "They love them."
"Il les aime" and "Ils les aiment" sound the same. In the listening exercises both should be accepted.
From what I can understand, the reason "les" is being used is because "them" is a direct object. Leur is used when it "them" is an indirect object.
E.g. - "Elle les aime" - She loves them. The object receiving the action of the verb is "them" so it is "les"
"Elle leur donne un livre" - She gives a book to them. The object that is being given is "un livre", which makes it the direct object. "Them" is the indirect object because they are getting the direct object, making it "leur".
You would pronounce it the exact same way (we pronounce "-ent" at the end of conjugated verbs as "-e"). When speaking, no one will know if you used the wrong one, however it would be considered a grammatical error if you were writing.
How do you tell the difference between: Les = The & Les = Them?
Is it just if it is used in different context or something?
Yes - the article les would be followed by a plural noun, not by a verb.
So if the sentence was about a pair of gloves "il les aime" would mean "he likes them". Right?
Just a doubt, can we use les as a gender neutral pronoun then? Some people's pronouns are they/them so is les the appropriate word or is there another one?
Is "he likes them" equally correct? What he loves/likes may not be people!