"This place is too scary!"
In simple words, 太 + adj. (+ 了) is a common expression for too + adj. The character 了 can be omitted, but I'm not sure whether Duolingo accepts the omission or not (if it doesn't, please report it).
I can't come up with an linguistic explanation for 太 + adj. + 了 structure. Personally I think 了 is actually a wide-spread phonetic loan. The real character should be interjection 啦.
Yes, 了 is the most common term used to express interjection. However, you can also use 啊
I think the 了 at the end of the sentence is there because of the exclamation mark which indicates change of state or surprise not just a statement. I believe it is being used this way through this whole exercise.