Actually, you cannot really tell from the Czech sentence. My first understanding would be that you slept just fine this past night but the night before was not so good. It could mean sleeping during the day and without additional context or explanation is wide open to interpretation. If I did not have a good night this past night, I personally would say "Dneska jsem nespala". I did not sleep today (I have not slept today).
What we refer to as "Včera jsem nespal" is most certainly described as "I did not sleep last night" in English. In Czech, "Včera jsem nespal" has a clear meaning of a man who did not sleep last night. In English, "I did not sleep yesterday" might be a good word to word translation to "Včera jsem nespal", but is rather ambiguous in English. Thus, "I did not sleep last night" should be not only accepted, but preferred as a correct answer. (I'm drawing myself a heart)
Duolingo generally uses the closest translation possible as the default translation. We do accept a lot more variants though. If your answer hasn't been accepted and you feel it should be, please hit the 'Report a problem'/'Flag' button -> 'My answer should be accepted.' That is the preferred way.
Sentence discussions are primarily intended for answering questions posed by learners; not for stating your personal language preferences. That only creates superfluous clutter which is hard to navigate and manage. Thank you.