is the spanish South American?
Can I change it to Madrid Spanish?
Yes, it is Spanish as it's spoken in South America... No, you can't change it.
Answers in European Spanish should be accepted too though. Also, you can always use other resources as an addition to Duolingo if you're more interested in European Spanish.That's how I deal with the issue.
Yes, Mexican Spanish is Latin American (Central American) Spanish not South American, but they are very similar in Central and South America.
It is World Spanish, meaning it is a Spanish that is more tailored to Latin American but can still be used in Spain and understood there. The only main difference between the two is pronounciation which can be tailored to the country you are in, from my experience.