Translation:Babies are cute.
By that same logic, the sentence 子どもが生まれました doesn't include any indication as to whose child was born, and yet the only answer Duo accepts is "my child was born". It's not wrong to assume that the same would be correct here as well. Consistency would go a long way, sadly these two aren't the only sentences affected by the lack of it....
は is a topic marker, whereas が is a subject marker. So essentially, 赤ちゃんはかわいいです means "as for the baby, it is cute"/"regarding babies, they are cute"; あかちゃんがかわいいです simply has it as the subject of the sentence. The difference is mainly one of emphasis. You're right that が tends to indicate one particular thing to distinguish it from the rest of the group.
That said, I think either could be used to mean "The baby is cute" in this sentence, depending on context.
Not necessarily. In this language, plurality works quite differently. Nouns without the plural marker ～たち aren't necessarily singular. So 赤ちゃん could either be "a baby", "the baby", "babies" or "the babies", while 赤ちゃんたち could only be either "babies" or "the babies". Additionally, Japanese uses the strategy of the "associative plural", where the plural marker can also carry a meaning of "X and those like it" or "X and their associates" rather than just "more than one X". So, 赤ちゃんたち could also mean "(the) babies and such". This is extraordinarily useful when applied to proper nouns, as something like "Smith, et al." can be translated as スミス君たち. Also, the plural marker can only be affixed to animate nouns, so "tables" is always テーブル. テーブルたち breaks the universe.