Learn Hardcore Indonesian: Kami memancing sebentar lalu duduk di atas jerami kering di tepi sungai. - We fish for a while then sit on the dry straw at the riverbank.

So kami memancing… suggests the speaker is talking about their group only, and the listener was not part of that group. If the listener was also fishing with them, you would normally say kita memancing sebentar… instead.

How is past tense shown in Kami memancing sebentar lalu duduk…? There’s no word like “did” or “were”.

Indonesian usually does not change the verb form for tense. Memancing can mean fish / go fishing / fished, depending on context.

Past time is understood from:

the situation (a story about yesterday, last week, etc.)
optional time words like tadi (earlier), kemarin (yesterday), tadi pagi (this morning), etc.

If you really want to make it clearly past, you could say:

Tadi kami memancing sebentar lalu duduk…
Kemarin kami memancing sebentar lalu duduk…

What exactly does sebentar mean, and where can it go in the sentence?

Sebentar means for a short while / briefly / a moment.

In this sentence:

Kami memancing sebentar = We fished for a short while.

Common positions:

After the verb: memancing sebentar, menunggu sebentar (wait a bit)
On its own as a request: Sebentar, ya = Just a moment, okay.

You normally wouldn’t put it before the verb here (sebentar kami memancing) unless you’re changing the focus or speaking in a more specific context.

Why is memancing used without an object? Should it be memancing ikan?

Memancing literally means to fish / to go fishing and it can stand alone without an object. Indonesians often say:

Kami memancing. = We went fishing.

If you want to be more specific, you can add an object:

memancing ikan = fish for fish (redundant but okay)
memancing udang = fish for shrimp
memancing lele = fish for catfish

So both kami memancing and kami memancing ikan are acceptable, but the simple form without an object is very natural.

What is the function of lalu here, and how is it different from kemudian or terus?

Lalu is a connector meaning then / and then / after that. It links two actions in sequence:

Kami memancing sebentar lalu duduk…
= We fished for a while and then sat…

Similar words:

kemudian = then / afterwards (a bit more formal or neutral)
terus = then / and then / kept (going) (more informal, conversational)

You could also say:

Kami memancing sebentar kemudian duduk…
Kami memancing sebentar terus duduk…

All are understandable; lalu and kemudian often sound a bit more neutral than terus.

What does di atas mean exactly, and how is it different from just di or just atas?

di = at / in / on (general location preposition)
atas = top / above / upper part
di atas (two words) = on top of / on / above (as a prepositional phrase)

In this sentence:

duduk di atas jerami kering = sit on (top of) the dry straw.

You normally need di in front of atas to talk about a location. Just atas jerami kering would be incomplete. Also, in standard writing, di atas must be written as two separate words, not diatas.

Why is it jerami kering and not kering jerami? How does adjective word order work?

In Indonesian, the typical order is:

noun + adjective

So:

jerami kering = dry straw
(jerami = straw, kering = dry)

If you said kering jerami, it would sound odd or poetic, like dry (thing) of straw, and is not the normal way to say dry straw.

Other examples:

rumah besar = big house
air panas = hot water
baju baru = new clothes

What does di tepi sungai mean, and is there any difference between tepi and pinggir?

Di tepi sungai means at the riverbank / at the edge of the river.

tepi = edge / side / bank (often sounds a bit more neutral/formal)
pinggir = edge / side, often used in everyday speech, can feel a bit more colloquial

So:

di tepi sungai and di pinggir sungai both mean by the river / at the riverbank, and are both common.

Why is kami not repeated before duduk? Is it okay to drop the subject like that?

Yes, it is normal and very common to drop the repeated subject in Indonesian if it is clear from context.

Here:

Kami memancing sebentar lalu (kami) duduk di atas jerami kering…

The second kami is understood, so it can be omitted. If you keep repeating the subject, the sentence can sound heavier or overly explicit in casual speech.

Is the overall word order fixed, or can parts like di tepi sungai move around?

Basic Indonesian word order is similar to English: Subject – Verb – (Object) – Adverbials.

The original:

Kami (subject)
memancing sebentar (verb + adverb)
lalu duduk (connector + verb)
di atas jerami kering (adverbial of place)
di tepi sungai (adverbial of place, more specific)

You can sometimes move adverbials for emphasis, for example:

Di tepi sungai kami memancing sebentar lalu duduk di atas jerami kering.

This is still correct, but more marked in style. The original word order is the most neutral and natural in everyday Indonesian.