If individual stars cannot be seen in other galaxies (excluding satellite galaxies of the Milky Way) then how can light from cepheids other galaxies be observed?
It is correct that we can't observation stars in other galaxies with the unaided eye. But with telescopes, we can see much more, including individual stars in other galaxies. We certainly have plenty of examples including several galaxies that don't orbit the Milky Way (and some outside the Local Group!)
Indeed, it was because we can detect individual cepheids in other galaxies that we can measure the distances to galaxies. Hubble found cepheids in the Andromeda galaxy in 1924. However, if your telescope does not have the light-collecting power and resolving power it would be nigh on impossible to detect a cepheid against the background of a whole galaxy. We build bigger telescopes to get the light grasp and resolution to do such measurements.
(converted from comments)
We can resolve individual cepheids (we can't resolve them as a "disc", but we can't resolve many stars even in our own galaxy as a disc) We can resolve them as points of light, distinct from its neighbours, and we can measure the brightness of individual stars.