conhecer means "to have knowledge", so it applies to movies, albums, actors, etc. Here, conhecer and saber work!
For me that's correct too (although I think they'd prefer "disto" for the translation).
This = este, esta, isto. That = aquele, aquela, aquilo, esse, essa, isso.
What he means is that the Brazilians don't really distinguish much between "this" and "that", but Duolingo insists on the difference.