Sentence Correction

Hey Guys,

I am trying to understand the usage of "that" and "which". I know that "which" is used to refer a noun, but am getting confused. Below are couple of examples that we can use for discussion. Tx much for your thoughts.

My question is can that/which modify the nouns (objects) in the prepositonal phrase?

Example of a sentence using "That"
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Cut-paper design, a popular pastime of Colonial women, became an art form in the hands of Abigail Lefferts Lloyd, a Revolutionary War heroine.
(A) design, a popular pastime of colonial women, became an art form in the hands of
(B) design, a popular Colonial women’s pastime, and it became an art form in the hands of
(C) design was a popular pastime for Colonial women, then it became an art form in the hands of
(D) design is a popular pastime of Colonial women that has become an art form by
(E) design, the popular Colonial pastime, became an art form for

In option D, which noun does 'that' modify --> 'pastime' or 'women' or 'colonial women'?

OA for above is A

Example of a sentence using "Which"
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Declining values for farm equipment and land, the collateral against which farmers borrow to get through the harvest season, is going to force many lenders to tighten or deny credit this spring.
(A) the collateral against which farmers borrow to get through the harvest season, is
(B) which farmers use as collateral to borrow against to get through the harvest season, is
(C) the collateral which is borrowed against by farmers to get through the harvest season, is
(D) which farmers use as collateral to borrow against to get through the harvest season, are
(E) the collateral against which farmers borrow to get through the harvest season, are

In option B, which noun does 'which' modify --> 'Declining values' or 'farm equipment and land' or 'land' alone

OA - E

YOUR THOUGTHS ARE MOST WELCOME