Yes, to get "Are your names William and Rose" the original sentence would have to be 'Zijn jullie namen Willem en Roos'. We greatly prefer to keep as close to the original as possible, even in word order, since different orders can often mean different things. Which is why we do not accept 'Are your names William and Rose" as a correct translation. "Jullie namen zijn Willem en Roos" is asking for confirmation, while "Zijn jullie namen Willem en Roos" is more like the speaker is just guessing names... slightly different meanings, in other words - just like the English sentences!
I believe this is too much of a subtlety here for a basic course. It should have been a regular narrative rather than interrogative sentence to avoid confusion and concentrate on learning the subject of the lesson, not the word order peculiarities. Moreover even from the viewpoint of English grammar the correct answer isn't strictly correct, but rather colloquial and its usage validity is highly dependent on particular context. However, I must admit that this one I'll remember for long, which is good just from learning perspective.
I think this is not literal translation, like translating your name into 'sea'. I think the translation here is merely to keep the same sounds of the name. It is just like you use English letters to write your turkish name, and not translating it. You have to do the same when moving from the Dutch alphabet to the English one, even though they are so similar.
Why are the names "Willem" and "Roose" are being translated in the correct answer section? Don't you think that stretches the translation way too far? Do learners have to try to figure out a translation for Saskia, as well? Or, for example, since my Turkish name means "sea" in English, shall i request the English people to use Sea instead the Turkish one?
Usually yes. It is written with two vowels in singular to indicate the long sound. (Look up open and closed syllables if you want more info) It's similar to doubling the consonats in English with verbs like sit sitting swim swimming. Think about how you pronunce site. If you would.write siting it would change the sound. Once you get the hang of it it is quite logical :)