Student or Learner
The sentence is copied from a test.
Although they heard the good news, they didn't feel happy.
I wrote this:
Although they heard this good news, they didn't feel happy.
My friend said it's not correct to use this to modify news because news is uncountable.
And this is to modify a countable noun.
Is it correct?
Your friend is wrong.
Actually, it's not correct to use this, but not for the reason your friend gave.
Here, 'this' is a demonstrative adjective, used to refer to something close or previously mentioned.
In isolation in a test question with no previous context, 'the good news' is the only correct form.