Translation:My older sister likes watching American TV shows.
I agree. The literal translation should also be accepted even though, for this particular purpose, "television" and "television shows" are essentially synonymous.
"Television shows" is "電視節目" as taught in a lesson shortly after this (e.g., https://www.duolingo.com/comment/25549667), so this issue seems more egregious.
There's a nuance between the two. "Watching" means paying attention visually. You are sitting there for an extended period of time paying attention to what's happening, focusing on it, not doing anything else. "Seeing" means noticing it visually, but nothing more. We pretty much never use see in this context.
There are some circumstances we use "see", like "I saw a movie last night" or "Have you seen the new Star Wars movie?". But if you look at them carefully, you see the question isn't if the person enjoyed Star Wars; the question is if the person is familiar with it, or has had the opportunity to watch it, not if the person payed attention while in the theatre. So there we use the word "see", but if a friend called me while I was in the theatre, I would say "not now, I'm watching a movie" but never "not now, I'm seeing a movie".
That's why they make the distinction here.