"Je suis en train de lui parler au téléphone." is accepted.
Why not I'm speaking to her.
This is an English to French translation. What are you asking?
As inaccurate as this may sound, I think Duolingo sometimes switches the order such that it's once an English to French translation and other times a French to English translation.
There are two different comment sections for each exercise. One for dictation and French to English translation and another one for English to French translation.
je parle avec lui au telephone. Speaking to him and speaking with him. Are these not the same thing?
They are both "je lui parle".