The only difference between options D and E is the presence of DUE TO and BECAUSE OF, so the choice is between these two phrases in the context in which they appear.

DUE TO is a adjectival phrase, but let's just say it is an adjective. It means CAUSED BY.
BECAUSE OF is an adverbial phrase, but let's just say it is an adverb. It means AS A RESULT OF.

If you look at option D, you should see that what it really says is that wildfires have become a threat CAUSED BY drought and booming population density, What is caused, in other words, is the THREAT. But the sentence is trying to say that the WILDFIRES themselves are caused by those things.The THREAT is merely a concomitant of the WILDFIRES. Furthermore, on the grammatical level, the sentence is saying that something has become an ongoing threat DUE TO something, and is therefore attempting to use an adjective incorrectly to modify a verb.

On the other hand, option E uses BECAUSE OF to say, logically, that WILDFIRES have become a threat AS A RESULT OF drought and booming population density. And on the grammatical level, the sentence works well because it says that something has become a major threat AS A RESULT OF something, and is therefore using an adverb correctly to modify a verb.

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