watashi wa yoru ni futon no naka de hon o yomimasu.

は marks 私 as the topic of the sentence: as for me or speaking of me.
So 私は sets up the sentence as something about the speaker.

If you used が instead, it would put more focus on I as the subject, often with a nuance like I am the one who.... In a simple neutral sentence like this, は is the most natural choice.

Here, に marks a point in time: at night.

So:

• 夜に = at night

Japanese often uses に with specific times, such as:

• 3時に = at 3 o’clock
• 月曜日に = on Monday

With words like 今日, 明日, and 毎日, に is usually not used.
With 夜, both 夜 and 夜に can appear depending on style and emphasis, but 夜に is perfectly natural here.

で marks the place where an action happens.

Since 読む is an action, で shows where that action takes place:

• 布団の中で本を読みます = read a book in bed / inside the futon

Compare:

• 学校で勉強します = study at school
• 部屋で食べます = eat in the room

So で answers the question where do you read?

Literally, 布団の中 means inside the futon.

In natural English, this often comes out as in bed, because a 布団 is traditional Japanese bedding laid out for sleeping.

So:

• 布団 = futon / bedding
• 中 = inside
• 布団の中 = inside the futon, or more naturally, in bed

の connects two nouns and often works like of or shows possession/relationship.

So:

• 布団の中 = the inside of the futon

Other examples:

• 家の中 = inside the house
• 箱の中 = inside the box
• 日本の文化 = Japanese culture / the culture of Japan

Here, の links 布団 and 中.

Japanese usually puts the verb at the end of the sentence.

So the basic order is often:

• topic / time / place / object / verb

In this sentence:

• 私は = as for me
• 夜に = at night
• 布団の中で = in bed
• 本を = a book
• 読みます = read

That is why 本を comes before 読みます.

を marks the direct object: the thing directly affected by the verb.

So:

• 本を読みます = read a book

Here, 本 is what is being read, so it takes を.

More examples:

• ご飯を食べます = eat rice / eat a meal
• 映画を見ます = watch a movie
• 音楽を聞きます = listen to music

読みます is the polite present/future form of 読む.

• 読む = plain dictionary form
• 読みます = polite form

Japanese often uses the polite -ます form in normal conversation, especially with people you do not know well, in class, or in standard example sentences.

This form can mean both:

• read
• will read

depending on context.

Yes, very often.

Japanese frequently leaves out subjects and topics when they are clear from context. So in real conversation, a speaker might simply say:

• 夜に布団の中で本を読みます。

That would still be understood as I read books in bed at night if the context makes it obvious.

Including 私 is not wrong; it just makes the subject explicit.

They are very similar, and in many contexts both can work.

• 夜本を読みます sounds less natural
• 夜に本を読みます is clearer and more standard
• 夜、布団の中で本を読みます is also natural, with a pause after 夜

So に helps clearly mark night as the time of the action.

It can mean either, depending on context.

Japanese nouns usually do not show singular vs. plural the way English does. So:

• 本を読みます could mean read a book
• or read books

If the meaning shown to the learner is I read a book in bed at night, that is a fine translation. But the Japanese itself does not strictly force singular.

Yes, it is natural and grammatically correct.

It clearly means something like:

• I read books in bed at night.
• At night, I read a book in bed.

Depending on context, a native speaker might also say slightly different versions, such as:

• 夜、布団の中で本を読みます。
• 夜は布団の中で本を読みます。

But your original sentence is perfectly good Japanese.