Not as far as I know; according to the Italian Wikipedia the current rules for monosyllables have become widespread at the beginning of the XX century; Treccani has a more detailed article which indicates the first half of the century.
With the modern rules, dà in the present tense must always be accented, while in the imperative it can be written dai, da' or dà (the latter is less correct, but accepted by dictionaries).
It is not 'la donna dà il biscotti al ragazzo' but rather 'la donna dà biscotti al ragazzo' - the sentence is saying 'the woman gives cookies (any cookies, NOT the cookies) to the boy. Basically in your English translation you've put a definite article where there was none in the original sentence.
Give me a break. It was marked wrong because i put...the cookies, instead if just cookies
It depends. In the UK and many of its colonies "biscuits" are the crunchy baked cakes that you'd accompany a cup of tea with, while "cookies" are the American variety, usually larger, sweeter and with a chewy texture; in the US and their area of influence "cookies" refers to both of the above while "biscuits" to small soft cakes. "Biscotti" refers to what Americans call "cookies", and we don't have much familiarity with American biscuits at all. Both Americans and Brits use "biscotti" to refer to a dried sweet bread that we know as "cantucci" or "tozzetti" depending on filling and area of origin, and that weirds us out to no end, because we don't even picture them as cookies in the first place.