Learn Spanish (Latin America): Iba al río cuando de repente vino un lobo. - I was going to the river when suddenly a wolf came.

This is a classic pattern for telling stories in Spanish! The imperfect tense is used to set the scene with a background action that was already in progress (iba, meaning I was going). The preterite tense is then used for the specific, sudden event that interrupted that background action (vino, meaning a wolf came).

Is the phrase de repente a clue for which past tense to use?

Yes, absolutely! De repente means suddenly. Because it introduces a sudden new action or interruption rather than an ongoing background habit, it is a massive clue that the following verb will be in the preterite tense, just like vino is here.

Since iba can mean I was going or he/she was going, how do we know who is going to the river?

You are right that the imperfect verb forms for I and he/she/it are exactly identical. In real life, the surrounding conversation would make it obvious who was walking to the river. If it were ever ambiguous, the speaker could just add yo for clarity: Yo iba al río.

Why does the verb venir change so much to become vino?