If I understand correctly, ця кава з цукром and це кава з цукром are both acceptable but have slightly different meaning.
The ця version implies there are more than one coffees and you're wondering if this particular coffee has sugar. The це version implies that you're not quite sure what "this" is, but you think it's a coffee with sugar.
The variants with Чи are now accepted in most of the exercises. I'm adding them where they are missing these days.
In this course "є" is not accepted because
1) It is not natural in standard Ukrainian
Using "є" is obsolete in modern Ukrainian and sounds unnatural. It is pretty common in some regions of Ukraine though, but not in the "textbook" Ukrainian.
2) Copying the structure of the English sentence
The idea is, if a learner actually does not speak any Ukrainian, they might write "є" simply because they are copying the structure of the English sentence. The developers of this course think that the users should learn that it's unnatural, even though it's technically not wrong grammatically. And if the users do actually speak some Ukrainian with the variation/dialect where "є" is natural (e.g. some Western Ukraine regions, Canadian born Ukrainians), they can understand that this course is also for people who don't speak Ukrainian at all and just go along with it, speaking the way they want at home, and following the "textbook rules" here :)
But no one really uses є in Ukrainian in such contexts.
I believe speakers of some Ukrainian dialects do. For example, the song Під облачком has the words «Ци та любов є од Бога дана?», where we wouldn't use «є» in a literary Ukrainian. It's a Lemko song, but Lemko is often considered a dialect of Ukrainian (although some would call it a language).
Of course, Duolingo teaches literary Ukrainian and not such dialects. But maybe Zonia435615 is a speaker of such a dialect. This would explain the misunderstanding in the comments.
Would be interesting to hear from someone who speaks the dialect about how they use the word. But Lemko dialect differs from literary form and all of the most broadly spoken forms of Ukrainian quite a bit (would be interesting to learn it separately, though because of historical circumstances there are not that many native speakers nowadays). And using word є in common spoken language would feel unnatural.