Thanks for the question! Note first that if S is not displayed, there are three more puppies that can be picked. Now we can note that at most, 3 kittens can be used (because we can’t have G and H from the 3rd rule), so picking only 1 more puppy isn’t an option. If we pick the other three puppies, on the other hand, that means we’ve picked W, which means we have to pick G (4th rule), which means that G is in the 2nd pen, which means that T can’t be picked (since in this scenario, the 1st, 2nd, and 5th pens hold kittens from rule 1 and 4, and T can’t be next to a kitten from rule 2). In other words, we have to pick two puppies: R and T/W. But there’s no way to display just R and T, since if we just have those two, we have three cats, and once, again, T will have to be next to a cat. So we’re displaying R and W.
We know that W is displayed, and so G is in the second pen. This is what (C) tells us, and (C) is the correct answer.
Hope this helps! Feel free to ask any other questions that you might have.