"They came home last night."
Translation:Ellos vinieron a casa anoche.
While both "returned home" and "came home" can be used equally well in English sentences, I think "volvieron" and "venieron" are equally good in Spanish. However, if you are translating "they returned home" then you use "ellos volvieron a casa", and if you are translating "they came home", then you use "ellos vinieron a casa".
I think the difference is that "Ellos vinieron a casa anoche" suggests that the speaker is in the same home, while "Ellos volvieron a casa anoche" suggests that the speaker is in a different home. There is no way to tell from the English which is meant, so I completely agree that it should be accepted.
Use "en casa" when referring to a location within the house. E.g. "Tengo un perro en casa" (I have a dog at home), or "Quiero estar en casa" (I want to be home). Use "a casa" when there is traveling involved, or when there is movement towards the home. E.g. "Voy a casa" (I'm going home), or "El fue a casa despues de la fiesta" (He went home after the party)
I am here to learn to speak Spanish not to learn how to translate Spanish so I support Duo being particular about which different words are used. When saying came home, using vinieron makes sense. When saying returned home, using volvieron makes sense.
Even though the meanings are similar it seems to me it is better to stick to the statements being offered rather than composing how it might be said using different words.