It should be. And considering it's not a jukugo word and doesn't have any other exceptions, it really should be using its kun'yomi reading of かた.

Definitely learn from other sources if you're aiming for natural japanese. I'd recommed Imabi, Tae Kim's Guide to Japanese, and some YouTube channels like Yuta and Misa.

it is long, but it's also more formal. You could certainly say この人は誰ですか, or even just だれですか, but those would be for a much more casual situation. If you were in a business meeting, for example, using 人 instead of 方 or 誰 instead of どなた would be considered extremely rude. It all depends on the circumstances. (And as I tell my students, it's a pretty good rule of thumb: the more syllables a phrase has, the more polite it is!)

A lot of questions seem to be missing a certain point to learning a language (though I'm no expert, and Duo certainly has its issues): There are multiple ways to say something. From my understanding, asking「どなたですか」verses this lesson's answer would functionally convey the same idea, but they aren't the same question -- not literally, at least. If I ask you to write down the words "Who is this person?", submitting the answer "Who is this?" would obviously not get a 100%. This is a rudimentary language course, not a choose-your-adventure story.

couldn't you shorten it all the way to just だれ? or at least だれですか? if that's too informal, you can still use こちらの方は? or この人は? without explicitly saying the who, right?

In Japanese, personal questions incouding asking someone's name are somewhat rude by tradition so, by and large, i'd recommend erring on the side of politeness. あの人誰(anohito dare) is something you could say but comes across as speaking both to a friend and about someone you have very little respect for. Hellonative could also be helpful for natural Japanese

It is because of formality level - こちらの is formal speach, and it should be used with 方 and どなた

Donata is more polite. It goes together with "kata" which is more polite than "hito" and "kochira no" which is more polite than "kono".

Donata is sonkeigo. As I understand, it's a manner of speech used by people in the service industry speaking to customers and that sort of thing.

Because you would actually translate it to "the person from over there", こちら is a more formal way to say ここ.

it's kata

I would use forvo / memrise / movies YT for that...I feel that's not one of DL's strong suits.

I recommend trying some audio courses. I personally find Glossika handy. Definitely don't rely on duolingo, It's not accurate enough.

こちらの方（こちらのかた）in here.

The former is more formal than the latter.

これ: this (demonstrative pronoun e.g. "this is an apple")

この: this (demonstrative adjective e.g. "this apple is red")

ここ: here

ここの: it's just ここ + the の particle

こちら: this way

こっち: same as こちら, but more informal

Yes, when used as a noun by itself 人 is read ひと