Learn Polish: Dziecko szło prosto na ulicę. - The child was walking straight onto the street.

Szło is the past tense of the verb iść (to go by foot/walk). This verb is highly irregular in the past tense. Because dziecko (child) is a neuter noun, we must use the neuter 3rd-person singular form, which is szło. If the subject were masculine it would be szedł, and if it were feminine, szła.

Why is it na ulicę and not na ulicy?

When the preposition na shows movement to a destination (onto the street), it requires the accusative case. Ulica is a feminine noun, so its accusative form changes the ending to -ę. If the child were already standing or playing on the street (showing location, not movement), we would use the locative case instead: na ulicy.

Does prosto mean 'straight' as in a straight line, or 'directly'?

It means both! In this sentence, it translates best to 'straight' or 'directly' towards a target. You will also hear prosto used all the time when giving directions, like idź prosto (go straight ahead).

Could I use poszło instead of szło in this sentence?

You could, but it would change the meaning. Poszło is perfective, meaning the action is completely finished: 'The child went onto the street.' Here, szło is imperfective, which translates to 'was walking.' It describes an action that was currently in progress, like setting the scene for a story.