I think we'd usually use while in a sentence like this, or at least I would. Entered that way, reported as answer should be accepted.
not quite, the two actions are performed successively, not simultaneously. So the '-po-' in this case is used to mean 'once they rested we played'
'While' would be used if the sentence was 'Walipokuwa wakipumzika tulicheza'/'Tulicheza walipokuwa wakipumzika'
Edit: it's also possible that they meant it as 'while'. I think it's also possible to use it like that. So yes, you're right!