The main challenge in the video is navigating through an 'optical illusion trap' which involves various levels with different visual puzzles. The player, referred to as 'Doctor Donut,' has to complete parkour and other tasks that are made difficult by optical illusions, such as upside-down rooms or objects appearing larger than they are.
The player struggles with some levels due to the deceptive nature of the optical illusions, making it hard to perceive the correct path or interact with objects. For example, in one instance, the player mentions not being able to see due to darkness, and in another, a crafting table appears 'massive,' altering their perception of its size.
'Elytra' refers to a game item that allows the player to glide. In the video, the speaker offers to give the player an elytra as a form of assistance or reward, suggesting it can be used to overcome difficult sections, though they advise saving it 'till the end.'
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