"There are seven people in their family."

Translation: उनके परिवार में सात लोग हैं।

[kooprad]

सात लोग उनके परिवार में हैं

Is duolingo being too rigid, or is this not a proper hindi sentence?

[AadishRahm]

why is उनके used instead of unka?

[another-dave]

At a guess (also a beginner), I'd say it's because when we add में as a postposition to "their family" it puts it in the oblique case

[Maheshwara19]

Can we use "unhe" instead of unke?

[kooprad]

उन्हें = उनको
Which is a different use case.