All politeness forms should be accepted. I'm surprised how often people are running into that problem.

Report it, they'll add it to the list of accepted translations as they get the reports. This is a beta, so there are still things to be fixed. You'll help them out by reporting it.

Yes, my parents are native Koreans, and they say that is also correct. Report it, as it's still in Beta.

나는 is more casual, it seems duo wants the formal version of 'I'

Technically it is, but you have to be careful because even if the person is your age if you do not know them you'll need to be using formal terms. :)