If translating this from English, can't this be both present or past tense?
Yes, but be aware that English present tense is far, far more likely to be present continuous: "are reading a letter."
How do you read chocolate?
Bela, gxi estas bela
Is that a rethorical question, or did you decide to ask about pronunciation on an exercise about reading a letter? :)
Rhetorical, it was one of the choices. :-)
Aren't both "Li kaj ŝi legas leteron" and "Li kaj ŝi leteron legas" correct? I thought the word order was unimportant in Esperanto.
the choice was "La kaj si leteron legas"
Are there indefinite articles in Esperanto?
Nope, no indefinite articles.