What makes this "is eating" versus "eats" ?
Either works, both are äter in Swedish.
Why does 'a apple'not work here?
It's "an apple" in English. Since apple starts with a vowel, an is used instead of a.
While this isn't a course on English, apparently the Duolingo software is strict about that, and the course moderators can't change the behaviour.
Is ä meant to sound just like "eh" like äter = eh-ter ?