Learn Dutch: Chronisch slapeloze volwassenen rusten overdag. - Chronically sleepless adults rest during the day.

Chronisch acts as an adverb here, modifying the adjective slapeloze. Because it describes the adjective (meaning chronically sleepless) rather than the noun, it doesn't take the -e ending. Slapeloze, however, modifies the plural noun volwassenen, so it gets the standard -e adjective ending.

Why does the spelling change so much from the root word slaap to slapeloze?

Two spelling rules apply here. First, combining slaap with the suffix -loos adds a connecting -e-, opening the first syllable (sla-pe-loos), so one 'a' is dropped to keep the long vowel sound. Second, adding the plural adjective ending -e opens the last syllable, so we drop an 'o' and change the 's' to a 'z' (lo-ze).

Since there are three words before the verb, does this sentence break the V2 (verb-second) rule?

No, it follows the V2 rule perfectly. The entire phrase Chronisch slapeloze volwassenen acts as a single subject block occupying the first grammatical position. The verb rusten correctly takes the second position.

Can I translate 'during the day' literally as tijdens de dag instead of using overdag?