Hello abhasjha and thanks for your question,
This sentence features two beloved topics by the GMAT SC authors. Tricky comparisons and parallelism.
1. "more" is a comparison marker, thus every time you sight it in a sentence you should do two things:
M. Make sure that the author wants to make a comparison in that particular sentence, if not another answer choice will get rid of any unnecessary comparison marker. So, every time you stumble upon words such as "more", "less", or any other "comparison" marker, ask yourself "Is the author's intent to make a comparison?"
R. Check whether the two compared items are both meaningful and parallel. Do not compare Beethoven with a piano, instead compare Beethoven with Chopin and a piano with a guitar.
2. The last chunk of sentence "fossils at least [..]" serves the purpose of addition. The author adds a new piece of information.
A group of paleontologists recently announced that a site in Utah has yielded fossils of some of the biggest armored dinosaurs ever found, and that they were at least 25 million years older than any similar dinosaur type previously found in North America.
(A) and that they were at least 25 million years older than any similar dinosaur type previously.
Parallelism error. "[..] announced that [noun], and that [verb]". This is wrong, we should expect either a noun or a verb on both sides. "they were" is ambiguous, does it refer to fossils or to dinosaurs? "[..] older than [..]" If "they were" refers to fossils, then the comparison is wrong. Can not compare fossils with dinosaurs. If "they were" refers to dinosaurs, it works but skews the entire meaning of the sentence.
(B) and they are at least 25 million years older than those of any similar dinosaur type that previously was.
"that" is missing after "and". Again, "they are" is ambiguous. But this time if "they are" refers to fossils the comparison is correct.
(C) and the fossils are at least 25 million years older than any similar dinosaur types that previously were.
"that" is missing after "and". The disambiguation issue has been addressed here. Now we know for sure that we are talking about fossils; we are not comparing them with other fossils, but rather with dinosaurs. This, once again, is wrong.
(D) fossils that are at least 25 million years older than those of any similar dinosaur type previously.
This sentence is perfectly clear, as said in (2) the author is telling us something else about the fossils. The comparison is correct [relative pronoun "those" substitutes the word "fossils"].
(E) fossils at least 25 million years older than similar dinosaur types previously.
Wrong comparison. "Fossils" is mistakenly compared with "Dinosaurs".
Hope it helps,
-tathastuGMAT.