"Do you understand what the teacher is talking about?"
Yeah, but if I was in a class and whispering to my friend, I would not necessarily add the 在. In the context, it would be understood that I would be asking about what the teacher was talking about. Actually, I'd just ask, "老师说什么?"
Duolingo couldn't possibly allow for all variations in all contexts - it's hard enough to account for all of the strictly correct variations. So in this course, English present progressive seems to be correlated with 在 in front of the verb in Chinese. Just the way it has been in this course so far.
It's a yes/no question. So you need to use 吗. If it's not, you won't need it.
This can lead to some tricky sentences for a Chinese beginner:
老师在说什么？ What does the teacher say?
老师在说什么吗？Is the teacher saying something?
It makes it a question. If you said it without the ma but used the right infection for a question, it would be understood as a question but has an implication that it is unexpected that you would understand.