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Hi, there. I'm happy to contribute to this.

First, let's address the pronoun & number difficulties.

"Family" is singular, so use of the pronoun "their" is incorrect. This is a classic GMAT SC mistake --- to use a singular noun (like "family", "company", "crowd", etc.) which implicitly contains a number of people, and then refer to it with a plural pronoun. The GMAT loves this as a mistake pattern. We find this classic mistake pattern in (A) and (B), so they are both right out.

On the other side of the sentence, "minds" is plural, so that requires a plural subject --- not the "his or her" singular subject of (C) --- "his or her minds" is incorrect, so (C) is out.

That leaves (D) and (E).
D: to appreciate that when people dehydrate, their
E: appreciating that as people dehydrate, their

What I find problematic about this question --- there's not a clear black/white grammatical distinction between these two choices. On the GMAT, you will always find something black/white that allows you to determine which of two choices is correct. What we have here is very subtle, more subtle that what I have seen from GMAC. Both "when" and "as" are correct, so the choice is simply between the infinitive "to appreciate" vs. the gerund "appreciating"

To my ear, the predicate following "result" should be an infinitive, not a gerund.

"the result is to do X" --- this sounds idiomatically correct, direct, and clear
"the result is doing X" --- this sounds weaker, less forceful, and awkward

Because of that, I'll say I prefer D as the answer, but I will hasten to add: I don't feel as committed to this answer as I would to an answer in the GMAT itself, because I feel there's not a strong enough black/white distinction among these answer choices.

Fundamentally, I think this is a poorly written question. It's surprising how many low quality sources out there are producing questions for the GMAT, and the unsuspecting public gobbles those questions up. In the next few weeks, Magoosh will publish book reviews of the various GMAT books on the our free blog ---- basically, all sources in print received poor grades except for MGMAT.

Here's a higher quality SC question:
http://gmat.magoosh.com/questions/1183
When you submit your answer, the following page will have the complete video explanation.

I hope that helps. Please let me know if anyone reading this has any further questions.

Mike

_________________
Magoosh GMAT Instructor
http://gmat.magoosh.com/

That's a great question!

Every pronoun must have a clear and proper antecedent, and according to most conventions, a noun in the possessive case does not constitute a proper antecedent. Is this an absolute black & white rule of grammar? Well, not quite --- it's more in the shades of gray. Nevertheless, on the GMAT, a sentence in which the antecedent of a pronoun is in the possessive case will NEVER be correct.

Therefore, in GMAT terms, the pronoun "it" cannot be used if the antecedent, "family's", is in the possessive case.

Does that make sense?

Mike

_________________
Magoosh GMAT Instructor
http://gmat.magoosh.com/