I don't know about those other exercises, but יפים is all about looks, not about behavior.
Why does this not translate into "children are pretty"? I mean, of course "pretty children" rather refers to a specific group, while "children are pretty" is very generalizing, but yet would this translation be grammatically incorrect?
Because "children are pretty" is a complete sentence. "ילדים יפים" is not a complete sentence, it's just a noun and an adjective describing said noun. Therefore, the former is not a translation of the latter.
"Children are pretty/beautiful" should also be accepted. Well noted. Duolingo depends on people to be accurate. So when you know you're answer should also be considered correct, you must click on the flag to inform them about it, so they can analyze and include your answer to the correct answer options.
Not really. Technically, it may be possible to write the sentence that way, but no Hebrew speaker would say it that way. It would be ילדים הם יפים.
"Good boys" would be "ילדים טובים".
Being good is different from being good-looking.
No, nice children are those who are well-behaved. They may or may not be pretty.
The word יפים is specifically about their looks, not their behavior.
As in, children in general, are beautiful?
ילדים הם יפים
You need the הם in this case. Otherwise, it is just "beautiful children"
Because that is now how you would say this in Hebrew.
When you say "ילדים יפים" this includes a noun and an adjective in the proper order. It's most natural to understand it as meaning "beautiful children". What you are proposing is to treat this as a sentence with the first word as the subject and the second word as the predicate.
In English you are usually taught that sentences have a subject-verb-object structure. More correctly, it is a subject-predicate-object, but it English the predicate is almost always a verb. In Hebrew the predicate (called nasoo - נשוא) is sometimes a verb, but not always. An adjective can also be the predicate. This can be demonstrated in the following slightly modified sentence:
This sentence works well as "the children are beautiful". Why? Because the adjective does not agree in definiteness with the noun. If they agree, it would read "הילדים היפים" and that would translate as "the beautiful children". Since they don't agree, the adjective is not a mere modifier to the noun, but it is, in fact, the predicate in a sentence.
So when reading these two words, we have to figure out whether the first word is just a noun or whether it is the subject of a sentence. As a subject of a sentence it would need to be well-contextualized, and the only context possible is referring to the group of all children in the world -- all two billion of them. They're all beautiful. That makes little sense compared to the alternative of considering this as a loose noun with an attached adjective.
If you still want the other meaning you need to clue us in. That's where the word הם comes in:
ילדים הם יפים
Here the word הם takes over the function of the predicate. The obvious presence of a predicate makes this a full sentence and forces the word ילדים into the role of subject. This is required for clarity. It pretty much replaces the "to be" verb from your English version. We could even use it in the version with the definite articles:
הילדים הם יפים
But here it is not required, so sometimes we omit it. Without the definite article, you cannot omit it.
The word ילדים is a male form, which means it can be used either for boys or for a mixed or unspecified-gender group of children.
You can be specific to an all-male group by using בנים (ba-nim), as opposed to בנות (ba-not), which are all-female.