"The tea is cheap there."
It doesn't "necessarily" mean very, both translations are correct. The meaning changes a little if you omit the 很. Without the 很 you are making a direct comparison to someone or something else. Kind of like adding -er
Actually you can say 茶那里很便宜 fluently but I consider that pretty casual (not that it is hard to understand). I don't know if Duolingo would like to include this answer.
p.s. If you know a bit about the “topic+comment” sentence structure: the Japanese sentence お茶はあそこで安いです may not sound casual but the Chinese one we are talking about does (because of the placement of 那里 and how Chinese natives perceive the whole sentence).
No idea, but I can tell you that “(在)那里的茶很便宜” is closer to “the tea there is (very) cheap” or “that place's tea is (very) cheap”.
“(在)那里茶很便宜” should be also correct and it is closer to “there the tea is (very) cheap” or “the tea is (very) cheap there”.
Chinese has the location/time to be grammatically before the subject usually.
i understand why the 很 is needed without meaning very, but why can't i use 是?
The reason 很 is needed IS the reason you can't use 是.
是 is like an equals sign. You can't say noun=adjective. However, an adjective can't be a predicate by itself (unless you are making a direct comparison), therefore 很 is often put before the adjective.
the meaning is abbreviated when you can say it without "very" but it is still correct.