"It snows here in December."
Translation:Nieva en diciembre aquí.
Nobody said it was wrong. But it's not the only correct answer. Spanish has a certain freedom when it comes to word sequence. The version "Nieva en diciembre aquí" sounds less natural to me than either "Aquí nieva en diciembre" or "Nieva aquí en diciembre" but those alternatives are not accepted. Which is bad.
"nieva" is a verb. In the present context, it means "it snows." "hace" is used with a noun, for example, "hace calor" (literally meaning "he makes heat"). If you want to use " Está," you would have to say, "Está nevando." But that would mean, "it is snowing." The question asks us to say, "It snows here in December." So the correct answer would be, "Nieva aquí en diciembre." Hope that helps answer your question. :)
"Cae" is a conjugated form of the verb "caer," which means "to fall." Please, refer to my earlier comments where I have explained that the correct answer should be "Nieva aqui in diciembre," and why "hace" would not be correct here. Someone recently told me that my answer is now accepted as correct as of 1/18/2019. Hope that helps? :)