One of the correct translations is "Isso é uma caneta" Is that really correct? I thought isso could only be used when the subject is not mentioned or said specifically.
Also, why can I not use "Essa é uma caneta?"
Isso é uma caneta is correct as well. You have been looking at a strange thing and ask yourself: "what is that?" You go there, pick that thing and say:"isso é uma caneta" :)