Translation:Teacher Wang only wants a cup of coffee.
The answer is phrased incorrectly. "Teacher Wang wants only a cup of coffee" is the correct answer. Wang doesn't want anything more than coffee.
The answer given, "Teacher Wang only wants a cup of coffee" is a different statement. That says that Wang doesn't think, doesn't breath, doesn't see, taste or smell. He only wants a cup of coffee. I doubt that this is the expression being uttered in Chinese.
I disagree. The phrase "Wang only wants a cup of coffee" is generally considered the same as "Wang wants only a cup of coffee" so at least the English phrase here makes sense. Most English speakers wouldn't even consider the absurd situation where wanting coffee is the only thing that Wang is doing (not even breathing, as in your example). We either [sensibly] assume that all of the verbs that people passively do all the time are implicitly excluded from a statement like this, or that indeed the speaker is saying that coffee is the only item in the set of things that Wang wants. To suggest that someone is doing exactly one verb, namely "wanting", you should be explicit; "the only thing Wang is doing is wanting coffee", however even this is likely not to imply that Wang is not breathing, as most English speakers would assume that Wang is still breathing.
It's true that this is not a natural expression in English and under the same circumstances "Mr. /Mrs./Miss" would likely be used. The problem with this is that it leaves out a key piece of information present in the original Chinese sentence. "Professor Wang" is acceptable in English, but changes the meaning. All factors considered, "Teacher Wang" may be a necessary evil, since the primary goal of this course is to teach Chinese. Now if this was the CH-EN course, I would strongly advocate setting the standard translation of 王老师 as Mr/Mrs. Wang and not accepting ""Teacher Wang", to make sure correct English is being taught instead of propagating misusage.
I think Teacher Wang is correct because it is the actually translation of what was said, not what you would say in English to your teacher in your english speaking country. It teaches you something about culture not just language. Also, the list of possible alternatives is excessive. Mr, Miss, Ms, Mrs, Mx, Dr (could have a PhD but be employed as a teacher) etc. It unnecessarily complicates the answer.
In English, we would almost never say a "glass" of coffee. In this case, I think it's because the cup for hot coffee is usually made of plastic or ceramic, and not the material, glass. Iced coffee could come in a glass, but it still sounds wrong to say "glass of coffee" in English. We'd say, "cup of coffee" unless specifically describing the mug or other vessel it was in.