Sentence Correction

"Bluegrass musician Bill Monroe, whose repertory, views on musical collaboration, and vocal style were influential on generations of bluegrass artists, was also an inspiration to many musicians, that included Elvis Presley and Jerry Garcia, whose music differed significantly from his own."

What does the sentence mean:
1: Bill M's repertory, views on.., and vocal style influenced generations on bluegrass artists.
2: Musician Bill M was an inspiration to many musicians such as Elvis P and Jerry G
3: Music of these musicians (Elvis P and Jerry G) was different from music of Bill M

What are the errors in this sentence:
1: Wordy - xyz were influential on abc. More precise usage is Xyz influenced abc.
2: Modifier error - musicians, that included Elvis P and Jerry G. This modifier is incorrect because 'musicians' are people and hence must be referred to using "who". Furthermore, typically comma is not used before 'that'. However, I have not come across any question in which this error will be the only reason to eliminate an answer choice.

Process of Elimination:

(A) were influential on generations of bluegrass artists, was also an inspiration to many musicians, that included Elvis Presley and Jerry Garcia, whose music differed significantly from
Incorrect. Wordy and modifier error as discussed above
(B) influenced generations of bluegrass artists, also inspired many musicians, including Elvis Presley and Jerry Garcia, whose music differed significantly from
Correct.
(C) was influential to generations of bluegrass artists, was also inspirational to many musicians, that included Elvis Presley and Jerry Garcia, whose music was different significantly in comparison to
Incorrect. SV Error - plural subject (repertoire, views, and vocal style) with singular verb "were", wordy - influential, unidiomatic - different in comparison to.
(D) was influential to generations of bluegrass artists, also inspired many musicians, who included Elvis Presley and Jerry Garcia, the music of whom differed significantly when compared to [/color]
Incorrect. Wordy - was influential, the music of whom, Unidiomatic - differed when compared to,
(E) were an influence on generations of bluegrass artists, was also an inspiration to many musicians, including Elvis Presley and Jerry Garcia, whose music was significantly different from that of
Incorrect. Wordy - were influence on, from that of his own

Your understanding of verb-ing modifiers is on the mark.

But just add this exception to your understanding - including does not really follow the rules of verb-ing modifiers. Whether it is separated by comma or not, it modifies the NOUN (or noun + modifiers) only.

So basically, the thing to keep in mind is that "including" is a versatile NOUN modifier. It modifies NOUN even when it is separated by a comma. And it may modify a noun that is separated by modifiers as well. Here are a few official sentences that exemplify this usage:

Example 1: (GMATPrep)

A study by the Ocean Wildlife Campaign urged states to undertake a number of remedies to reverse a decline in the shark population, which includes the establishment of size limits for shark catches, closing state waters for shark fishing during pupping season, and requiring commercial fishers to have federal shark permits.

Correct Choice D. including establishing size limits for shark catches, closing

Comma + Including modifies "REMEDIES". But look at the modifiers that lie between this modifier and the modified noun.

Example 2: (GMATPrep)
The new image of Stone Age people as systematic hunters of large animals, rather than merely scavenging for meat, have emerged from the examination of tools found in Germany including , three wooden spears that archaeologists believe to be about 400,000 years old.

E)mere scavengers of meat, has emerged from the examination of tools found in Germany, including

Comma + Including modifies "TOOLS". But look at the modifier that lies between this modifier and the modified noun.

Example 3: (OG12 # 120)
A firm that specializes in the analysis of handwriting claims from a one-page writing sample that it can assess more than three hundred personality traits, including enthusiasm, imagination, and ambition. 

Correct Answer (D) to be able, from a one-page writing sample, to assess 

Comma + Including in non-underlined portion of the sentence modifies the closest noun - personality traits.

TakeAway Message - Comma + including does not modify preceding clause (as other comma + verb-ing modifiers do). This expression modifies the preceding noun or noun phrase.