Learn Spanish (Latin America): Aquella casa está allí.

Both translate to "that," but esa is used for something relatively close to you or the person you are talking to. Aquella is used for something far away from both the speaker and the listener, like saying "that house way over there."

Why is the word aquella instead of aquel?

Demonstrative words always match the gender and number of the noun they point to. Because casa (house) is feminine and singular, you must use the feminine singular form aquella. If you were pointing to a masculine noun like a car (auto), you would use aquel.

We learned that ser is for permanent things. A house doesn't move, so why use está?

This is a very common trap! Even though a building's location is permanent, you must always use estar (which gives us está) to talk about the physical location of people, places, or things.

What is the difference between allí and allá? Could I use allá in this sentence?

Yes, you could use allá. Both mean "there" or "over there" and pair naturally with aquella. Allí usually points to a more specific or exact spot, while allá suggests a more general area or an even greater distance.