Translation:The Chinese tourists in the square walk to the clock, and take photos.
It's OK, but you should have the definite article: "The Chinese tourists..."
Your translation makes it sound like the clock is on the square, and the tourists are walking toward it, but the tourists may or may not be on the square.
Duo's translation (and the original Hungarian sentence, I think) tell us that the tourists are on the square, and they are walking toward the clock, but we're not sure if the clock is on the square or somewhere else.
Answer 1. Because a square is a flat area, and from the Hungarian point of view, you're on a surface (-n) and not inside an enclosed space (-ban/ben).
Answer 2. Sometimes there isn't any compelling logic to prepositions and they don't correspond very well between languages. Some things you just have to memorize, like: tér takes the -re/-n/-ről endings, and egyetem (university) also takes the -re/-n/-ről endings, but iskola (school) takes -ba/-ban/-ból. Posta (post office): -ra/-n/-ról. Bank (bank): -ba/-ban/-ból. Because: just because.