(1) How do you know what kids and teens (hereinafter, collectively "kids") like?
I don't. I know what I like. Writing to what you think kids will like is ultimately counterproductive for at least the following reasons: (i) What you perceive "kids will like" could simply be wrong, in which case your efforts to pinpoint that which kids will like will have been a waste of time; (ii) your efforts to write "what kids will like" will take your focus off story, i.e., the craft of writing, which is ultimately the most important thing you can do; and (iii) often I hear "kids like it" when people mean "my kids like it," which may be true and valid but anecdotal is not universal.
Also, note that, in the three or four years before Harry Potter came out, publishers were telling writers they weren't going to publish fantasy because "kids don't like it." Now, you can't receive a publisher catalog without them touting the "next" Harry Potter.
Finally, realize that the statement "kids like it" is as much a null statement as is "adults like it": Kids are not a monolithic bloc (think, Borg collective, if you will); they are less experienced than adults, not necessarily less intelligent or diverse.
(2) Do you have to dumb down the language when writing for kids?
No. Well, in one picture book manuscript I decided not to use the word "tesseract." (If you don't know what a "tesseract" is, it's been too long since you've read A Wrinkle in Time.). But in any event, picture books are a different case.
To be continued...