Translation:Where in China do you live?
"Where in China are you guys living? " is not accepted as a correct answer. However, for other questions, phrases such as "is living in" and "are living in" are just as acceptable as "lives in."
There is also a "们", which would make the pronoun plural, meaning that multiple people are being referred to. "You guys" not being accepted with phrases such as "you all" or "y'all" was a problem that was mentioned before in another discussion, and has since been fixed (at least for the question in that lesson), so it seems possible that this problem is unique to this question. Hopefully, this is not a recurring issue.
Its not Na er its Nar its teaching us 儿 means er but Nar is actually a word onto itself take a look at the link below from a Chinese dictionary.
If you look at or up the 儿 there are a couple definitions one is for son/child and another is a retroflux final radical. No idea what this means myself im guessing it means it just goes at the end sorta like a suffix.