Learn Spanish (Latin America): Hacía un día que caminábamos por este bosque inhóspito. - We had been walking through this inhospitable forest for a day.

This is the past equivalent of the hace... que time expression. To say "we have been walking for a day" (an action that started in the past and is still ongoing in the present), you use the present tense: hace un día que caminamos. To shift that timeframe entirely into the past ("we had been walking"), both verbs shift to the imperfect: hacía un día que caminábamos.

The English translation says "had been walking." Could I just translate that literally as habíamos estado caminando?

While habíamos estado caminando is grammatically correct and understood, Spanish strongly prefers the hacía + [time] + que + [imperfect] structure to express how long an ongoing action had been happening at a point in the past. This formula sounds much more natural to a native speaker.

Why do we use por instead of para here?

Por is used to indicate movement through, along, or within a physical space. Since the walking is happening through the forest, por is the correct choice. Using para would imply that the forest is your final destination (e.g., heading towards the forest).

Is inhóspito related to the English word "inhospitable"?