Translation:That textbook is not difficult.
Duo only offered a "hard" card instead of "difficult" for むずかしい。I think this is the first time I've seen duo translate it this way. Does むずかしい ever mean physically hard, or is it only difficult?
Yes, 'むずかしい' is mainly translated both 'hard' and 'difficult'.
I think that it is not easy to understand the textbook when I hear that 'the textbook is difficult'. I think that playing piano is not easy when I hear 'it is hard to play the piano'.
Some will argue that "Sore wa muzukashii, Danna san" should be translated, "That won't be possible, Sir." I don't really agree but do see the point.
Either one could work, depending on whether the textbook is near (or connected to) the listener.
The way it was taught to me in my high school class is that この is for things near the speaker, その for those near to the listener, and あの for those far from both.
English doesn't really capture this nuance (as is the case with many other things in Japanese) but "that ... over there" is a decent translation for あの if you really want to distinguish between the three in English.