why am I getting marked down for using "voisinage" when its perfectly acceptable as a neighbourhood?

The most commonly used term is le quartier (when talking about the general geographical neighborhood). Le voisinage means more the people than the geographical area.

Both are acceptable in the context of the sentence in this lesson.  Voisinage can refer to either the “proximité “, or to the group of neighbours (inhabitants of the area/locality). 

In a city centre, you are more likely to hear reference to < le quartier >.