Is it acceptable to add an assumed "there" to the direction in this translation? eg "The red car is not up there, but down there" Without the "there" it sounds strange to me, and I'm not sure when I would use this phrase outside of an elevator
Yes, that would also be correct.
A lot of these sentences as far too complex for this early in the course.
In another sentence DL translation for "lent" was "down". Why is it not accepted here?
What is the difference between "folott" vs "fent," and "alatt" vs "lent?"
fölött and alatt are postpositions and accompany a noun -- az asztal fölött "above the table", az asztal alatt "below the table".
fent and lent are adverbs and stand alone -- a bit like "at the top" and "at the bottom".
Wow did not accept my answer because I did not use a comma
Nor did you just now after 'wow'. But my impression is that Duo doesn't worry much about punctuation.