Translation:She worships in the Roman Catholic Church in the town.
Is "she worships in the town's Roman catholic church" not a reasonable translation?
This is quite a complicated sentence but arguably appropriate given its position in one of the last few units of the course.
Your suggested translation would be a different sentence in Welsh:-
"Mae hi'n addoli yn Eglwys gatholig rufeinig y dref" (lit:- She worships in church catholic roman of the town)
Because there is not an equivalent in Welsh of 's (eg town's) to indicate possession it's necessary to change the order of the words, and in particular the definite article, to show possession.
No, because that sentence ("Mae hi'n addoli yn Eglwys Gatholic Rufeinig y dref") is linguistically different. But I agree that both would suggest the same thing in both languages.