"This watch is too expensive."
Translation:Este reloj es demasiado caro.
Este, esta, esto- >you use this for things that are close to you. Este for masculine, esta for femine. Esto means "it"
Ese, esa - >you use this for things that are bit further away. Ese for masculine, esa for femine.
Aquello, aquella - > for things that are far away. Aquello masculine, aquella femine
Yes, "eso" means "that". There is also the word "aquel" that is other way to say "aquello".
Este, esta and esto are used to something next to you; ese, eso and esa are used with objects next to the second person, but not next to the one speaking. Aquel, aquello and aquella are used with things far from both speakers.
When I put "demasiado" in for "too," it kicked it back as wrong and said that "extremadamente" was the word I should be using instead (though that wasn't an option when I rolled over the word). Does someone know if this is a cultural thing where they are interchangeable, or if there is just a problem with the question?
they mean two different things. Muy caro means very expensive. demasiado caro means too expensive so they're not interchangeable. I want front row seats to that concert but they're just too (demasiado) expensive. Balcony seats are very (muy) expensive but, if I work a couple extra shifts, I can buy two tickets.
People make languages, that's why words come to have more than one meaning, e.g.: