Why "tuo" and not "tämä"?
Tämä = This
Tuo = That
Nämä = These
Nuo = Those
Why is "that is a modern room" not accepted?
That would be "Tuo on moderni huone".
Is houne pronounced with the 'k' for h letter or 'h', I think I've heard both of the pronunciations for this word.
and now I can't tell which one is correct. :/
K has nothing to do with this word, so if you've heard that somewhere, it's wrong. It's just h.