Literally, "man" means "one" in the sense of "people in general": One can see the beach from the hotel.
However, "one" can sound slightly stilted in English, whereas "man" is a normal word that is frequently used in German. For this reason, other translations are possible, such as "you" (You can see the beach from the hotel) or the passive (The beach can be seen from the hotel). In some contexts, "we", "they" or "people" might also be an option. I don't know whether all of these options are accepted in the Duolingo exercises, but they are the ones you would use if you had to translate a real text.
See also this useful summary (PDF file):
They sound identical; only the spelling is different. However, "Mann" is normally used with a determiner (der/ein Mann - the/a man, etc.) in German, whereas the German word "man" is never used with a determiner. You could use the word "Mann" without an article in a newspaper headline, though.
It's not! It's completely correct. In fact as an American, that sounds better to me than "one needs water", which sounds very old fashioned. In fact, good job to you on finding a better translation! However, duolingo often does not have all the correct answers in their database.
It's not incorrect but I think duolingo marks it as wrong because it wants you to know it's supposed to mean "people" in general. One of the accepted translations would be "People need water". "Man" is used when making a general statement, this is why it does not have a determiner before it, whereas "a person" is not a general statement; Although it has an indefinite article, "a person" refers to one individual as opposed to 'people'. Anyway, I think this is why duolingo took one heart from you ;) But yeah the gist is that humans need water.
Because it doesn't literally mean only YOU need water. It'd be like saying "you can't breathe underwater" when you really mean anyone in general.
However, if you meant someone looks dehydrated and you think they need water, then yes, use 'du', as that's specific to that person.
"Someone" (German: jemand) is more specific than "man" ("one"). "Man braucht Wasser" means that human beings/people in general need water, e.g. in order to survive. "Someone needs water" means that a specific person needs water, even though we don't say or know who that person is.
It really depends on the context. In contexts in which the speaker/writer excludes himself from the group he refers to, "they" or "people" would also be an option, e.g. "Man sagt, dass er eine Affäre mit seiner Sekretärin hat" (They say that he is having an affair with his secretary).
I don't think I would use "they" in the DL sentence, though. But without context, it's hard to tell. For more information on translating "man", see this short summary:
The -t ending for present tense verbs is used both in the third person singular (er/sie/es = he/she/it) and in the second person plural (ihr = you [familiar plural]):
er/sie/es braucht = he/she/it needs
ihr braucht = you [familiar plural] need
See also this table: http://german.about.com/library/blregverbs.htm
As I said above, "man" literally means "one", so you use the same verb form you would use for he/she/it: man braucht = one needs. In many contexts, it sounds more natural to say "you" instead of "one" in English, but this has nothing to do with the fact that the present tense verb forms for "he/she/it/one" and "you [familiar plural]" happen to be identical in German.
No, the verb doesn't change. Literally, "man" means "one", and like the English word "one" it is used with a 3rd person singular ("he/she/it") verb form: man braucht (one needs).
That you can use a number of other words instead of "one" in English can cause problems when translating from German to English, but these are translation problems that have nothing to do with German grammar as such.
The meaning is probably much the same, but the emphasis different. "One" sounds more intangible in tone (and I think maps better to man in German), "Man" more biological (which is why I thought it translates better as der Mensch). Others may disagree :) Level has little to do with it!
No, you can't use man to adress someone. The main use is, like you said, for observation/facts but also for general commands. It means "one" in the sense of "people in general". Usually it is translated into English as passive voice
man verkauft jährlich viele Kleider = one sells many dresses yearly (many dresses are sold yearly).
man kann nicht raufen = one cannot smoke (smoking is not allowed)