Translation:Living here is comfortable.
There are some adjectives you have to use with 很, so in that sense it does not completely translate as 'very' although it is still used for emphasis. Given the context, 'very comfortable' should be accepted.
This is just duolingo do its thing with 很 sometimes meaning very/really and sometimes not...
Yes, 住 means to reside/ live/ stay somewhere, it can be either long-term (live) or short-term (stay). "I live in Beijing" 我住在北京. "I'm staying at the Four Seasons hotel" 我住在四季酒店.
I agree with Alex on this one, can anybody offer any further info please?