Because specie is a feminine singular noun, and questo/questa has to agree with the noun.
So:
Italian agreement is very important: articles, adjectives, and demonstratives usually match the noun in gender and number.
Vive is the third person singular form of vivere = to live.
Since the subject is questa specie = this species, which is singular, the verb must also be singular:
So:
If the subject were plural, the verb would change:
Because nel is the contraction of in + il.
So:
This is very common in Italian. Prepositions often combine with definite articles:
Since bosco takes the article il, in il bosco becomes nel bosco.
Not in this sentence.
Here you need the definite article, because the phrase means in the woods / in the forest as a specific habitat phrase with a noun that normally takes an article in this structure.
So:
Italian sometimes omits articles in certain fixed expressions, but bosco in this sentence normally uses the article.
This is the normal, neutral word order:
subject + verb + place
Italian can change word order for emphasis, for example:
That is possible, but it sounds more marked or literary. For a basic statement, Questa specie vive nel bosco is the most natural order.
No. In Italian, subject pronouns are often omitted because the verb ending already shows the person and number.
So Italian normally prefers:
rather than adding a pronoun unnecessarily.
Also, since the noun questa specie is already stated, adding essa would usually be redundant.
Yes, you could, and it would be understandable.
But vive nel bosco is very natural when talking about where an animal or plant species lives. It describes its habitat in a simple, general way.
Both work, but vive is especially common and straightforward.