As an audio question, it seems like it should also accept, "il la remercie" but there's no option under "report" to request that answer to be considered as correct.
It should, but "il la remercie" can't be added to only the audio portion. Audio disabled, thanks!
I can't differentiate between the singular and plural unless I see the accompanying text!
You are right, they are homophones. For this reason, you shouldn't get any audio dictation exercises. In real life context will let you know.
what is wrong if i say they thank him? la could be her OR him
No, la can never be him. La is always feminine.
To thank him, you'd write "ils le remercient".