In English, "seeing pink elephants" is a phrase associated with intoxication which is a reference to the 1941 Disney film "Dumbo" in which Dumbo, under the influence, hallucinates a group of pink elephants. I'm not sure if this could possibly be a quote from the film in French but it is not an idiom in English.
Questions triggering a yes/no answer can come in 3 forms, from formal, to standard, to relaxed registers:
Formal: l'éléphant rose boit-il du vin ? - real subject is repeated with a pronoun and verb is reversed with subject pronoun.
Standard: Est-ce que l'éléphant rose boit du vin ? - interrogative phrase "est-ce que" (= is it that?), then question in statement format.
Relaxed (in speech): L'éléphant rose boit du vin ? - only the question mark and voice raising on the last syllable will indicate this is a question.
You may not have learnt it before, but it needs a first time for every new notion.
"Boit-il" is the most formal way of asking a question, with the use of inversion Verb-Subject (pronoun). There are two less formal constructions:
Standard: est-ce que l'éléphant rose boit du vin ?
Oral/casual: l'éléphant rose boit du vin ?
I think the computer did not correctly identify the issue here. I don't think that "the pink elephant, is he/it drinking wine?" would be natural English anyway.
The way questions are constructed in English is quite different from the French way, and what Duo proposes here as the correct answer (at the top of this page) is probably the best translation.
Thanks sitesurf for your help. If so what will the 'il' refer to? I understand that it is impossible for one to do a direct one-to-one translation from English to French and vice-versa. However, one need to understand these rules, if any, to be able to know when to use it and when not.