Learn German: Fahrt ihr dorthin? - Are you driving there?

dort just describes a fixed location ("there"), but dorthin describes a direction ("to there"). Because the sentence is about driving to a destination, you need the directional adverb hin (meaning movement away from the speaker) attached to dort.

Could I use dorther instead of dorthin in this sentence?

No, because her indicates movement towards the speaker. dorther would mean "from there" or "towards here". Since you are asking if they are driving to a destination away from you, you must use hin.

Why doesn't Fahrt have an umlaut (ä)? Doesn't the verb fahren change its vowel?

The verb fahren does have a vowel change, but only in the singular forms: du fährst and er/sie/es fährt. The plural "you" form (ihr) doesn't get the umlaut, so it is just ihr fahrt.

Could I say dahin instead of dorthin?

Yes, absolutely! dahin and dorthin both mean "to there" and are often used interchangeably in spoken German. dorthin sounds just a little bit more specific, as if you are pointing at a spot on a map.