Esa modista del barrio diseña vestidos sencillos y muy bonitos.

Because esa has to agree with modista in gender and number.

• esa = feminine singular
• ese = masculine singular

In this sentence, the speaker is referring to a feminine modista, so esa is the correct form. Spanish demonstratives work like adjectives here, so they must match the noun: ese chico, esa chica, esos vestidos, esas faldas.

Not necessarily, but in this sentence it is feminine because of esa.

A useful point is that modista is a profession noun. In actual usage, it often refers to a woman, and modisto is also used for a man, especially for a male fashion designer or dressmaker. So here, esa modista clearly means the person is female.

del is the contraction of de + el.

So:

• de el barrio → del barrio

This contraction is mandatory in normal Spanish.

Here, del barrio describes modista, not vestidos. It means something like from the neighborhood or the local neighborhood dressmaker. In other words, it identifies which dressmaker the speaker means.

Because Spanish usually leaves out subject pronouns when they are not needed.

The subject is already clear from:

• the noun phrase: Esa modista del barrio
• the verb form: diseña

So ella diseña would usually sound unnecessary unless you wanted extra emphasis or contrast.

Because it is the 3rd person singular present tense of diseñar.

The subject is esa modista del barrio, which is she / that dressmaker, so the verb must match that subject:

• yo diseño = I design
• tú diseñas = you design
• él/ella diseña = he/she designs

So diseña is the correct form for she designs.

In Spanish, a plural direct object often appears without an article when it means something general or indefinite.

So diseña vestidos means she designs dresses in a general sense.

If you added an article or determiner, the meaning would change slightly:

• diseña vestidos = designs dresses
• diseña unos vestidos = designs some dresses
• diseña los vestidos = designs the dresses

Here, the sentence is talking generally about the kind of things she designs.

Because they must agree with vestidos.

• vestido is masculine singular
• vestidos is masculine plural

So the adjectives also become masculine plural:

• sencillo → sencillos
• bonito → bonitos

This is basic adjective agreement in Spanish: adjectives usually match the noun in gender and number.

Because in Spanish, descriptive adjectives often come after the noun.

So:

• vestidos sencillos
• vestidos bonitos

is the most normal order.

Putting the adjective before the noun is sometimes possible, but it can sound more literary, subjective, or stylistically marked. For a straightforward description, Spanish usually prefers noun + adjective.

Grammatically, muy most directly modifies bonitos, because it is placed right before it:

• sencillos y muy bonitos = simple and very pretty

So the most natural reading is:

• sencillos = simple
• muy bonitos = very pretty

If the speaker wanted very to apply clearly to both adjectives, they would usually say something like:

• muy sencillos y muy bonitos

A few pronunciation points stand out:

• ñ in diseña is pronounced like ny in canyon
• in most of Spain, c before i in sencillos is pronounced like th in thin
• ll in sencillos is usually pronounced like y in many parts of Spain

So a rough guide for much of Spain would be:

• diseña ≈ dee-SE-nya
• sencillos ≈ sen-THEE-yos

That said, pronunciation varies by region, and in some areas you may hear an s sound instead of the th sound.