Translation:I bought a lot of comic books on Sunday.
I have never come across マンガの本, but if we want to emphasize that we refer to the actual book instead of the story, we can say マンガ本（ぼん）
e.g. この本はマンガ本のサイズです. This book has the size of a comic book.
If we say この本はマンガのサイズです, then it is ambiguous whether the length of the content is of a comic, or the size of the book is of a comic book. Either 長（なが）さ or 大（おお）きさ is needed to clarify.
Does "manga" in Japanese refer to all comic books including Western ones?
Because here, we say "manga" in English to distinguish Japanese comic books from every other kind - mainly, I think, because of the distinct difference in traditional art style between the two regional media.
Do the Japanese make such a distinction in reverse?
Because if they do, Duolingo should simply translate "manga" (in katakana) as "manga" (in romanji).
There are a number of different systems of romanization in use. While rōmaji (Hepburn) or rômazi (日本式・訓令式) would be fine, personally I really don't like "romaji" which leaves out any indication of the 「ー」. I went with u here which makes sense if we're not using diacritics just because in hiragana, the ー would become う. The more ワープロ-style "ro-maji" or "ro-mazi" also seem okay to me. I actually like all the other ways a little better than the macron, just because it feels like the longer vowel ought to take up horizontal space in one way or another.
Both should be accepted, but there is a subtle difference in the emphasis when using に vs は, which really just depends on the context.
If someone asks you "What did you do on the weekend?" and you answer "On Saturday, I did X. Then on Sunday, I bought a lot of comic books", it would be more natural to use 日曜日は because you're changing topics from what you did on Saturday to what you did on Sunday; in other words, "Sunday" is important enough to become the topic.
If someone asks you "Why don't you have any money?" and you answer "Well, I bought a lot of comic books on Sunday", it would be more natural to use 日曜日に because the "on Sunday" part is kind of incidental to the question.
I think it should be accepted, although it feels like you're being a little too interpretive with the translation for this kind of learning exercise.
While "last Sunday" is the only Sunday that would make sense with a past tense verb, there is a way to specify it in Japanese, 先週日曜日 (せんしゅうにちようび), which isn't being done here.
I go the same error right now. "Last Sunday" and "on Sunday" feel totally interchangeable in this context. It doesn't feel like being "too interpretive" from this vantage; I don't want to stress that it was "last" Sunday (in which case I would use the phrase you offered); it's just another way of expressing it.
I'm a native (Australian) English speaker, and it sounds perfectly natural to me. There's nothing about "on" that excludes it from referring to the past.
"Last Sunday" works as well, but what if it was Sunday two weeks ago? "I bought a lot of comic books Sunday two weeks ago" works colloquially, but "I bought a lot of comic books on Sunday two weeks ago" is grammatically correct and sounds more natural to me.