Learn Italian: Insomma, quell'albero tra le dune è solo un miraggio. - In short, that tree among the dunes is only a mirage.

Because the current lesson focuses on anche se, here is how it works: for a hypothetical situation ('Even if it were...'), you must use the subjunctive: Anche se quell'albero fosse solo un miraggio... If you are stating a factual reality ('Even though it is...'), you stick to the indicative used in this sentence: Anche se quell'albero è solo un miraggio...

How does insomma change the tone of the sentence?

Insomma is a very common conversational marker. At the beginning of a sentence like this, it means 'in short,' 'in conclusion,' or 'to sum up.' It implies the speaker has been looking at the tree, maybe debating whether it is real, and is now delivering their final verdict.

Can I use soltanto instead of solo here?

Yes, you can use soltanto or solamente. In this sentence, solo is acting as an adverb meaning 'only' or 'just.' If it were an adjective describing the tree instead (for example, un albero solo), it would mean 'a lonely tree.'

Is there any reason to use tra instead of fra for 'among the dunes'?