We are asked to identify what Passage B indicates.
(C) "Cather regarded at least one of her works as not fitting straightforwardly into the category of the novel." This is supported by lines 30-33. Here, Cather regards her work "Death Comes for the Archbishop" as not fitting clearly into the novel category and instead serving as a narrative. Therefore, (C) is correct.
(E) "Cather's work was regarded as flawed by most contemporary critics." The word "most" is not supported by the information in this passage. Although we are told that Cather's "severest critics have always questioned precisely her capabilities as a novelist," we are not told that MOST critics- let alone contemporary critics specifically- felt this way. Therefore, (E) is incorrect.
Does that make sense? Please let us know if you have any other questions!