Received a PM asking me to comment on A and E - in particular, why "them" is a problem in E (according to the test-writers).
The basic lesson here is that the official test writers do not like multiple modifying clauses in a row that separate the subject and verb. The longer the modifying clauses (or phrases) are, the more "awkward" they are, according to the writers.
Subject = Beatrix Potter
Verb = capitalized
Modifier #1 = in her book illustrations
Modifier #2 = carefully... narratives
So A says: Subject, M#1, M#2, verb. The test writers think this is awkward. Are there any better choices? Yes. C says: M#1, M#2, Subject Verb. That's "better" than A.
E changes the status of M#2. That bit is now elevated to one of two main verbs; it's no longer a modifier: Subject, modifier, verb (coordinated) and verb (capitalized). How does this change things?
The test writers hold to a somewhat obscure rule about pronouns. Prepositional phrases are modifiers. "In her book illustrations" is a prepositional phrase and it is an adverbial modifier; it modifies the main clause ("Beatrix Potter... coordinated them... and capitalized on..." The test writers say that pronouns used in the main clause cannot refer to nouns located in a (subordinate) modifying phrase, because the modifying phrase is already itself referring to the main clause. It's like an endless circle.
I think it's a bit easier to "hear" if we plug in the antecedent for the pronoun:
Beatrix Potter, in her book illustrations, coordinated them...
Beatrix Potter, in her book illustrations, coordinated her book illustrations...
So she coordinated the illustrations in the illustrations? Do you "hear" the problem now?
(By the way, going back to A for a minute, you can try this same thing there - same problem. "BP, in her illustrations, coordinating her illustrations, capitalized..."
Alternatively, you might be tempted to interpret "in her book illustrations" as a noun modifier, not an adverbial modifier. If so, then the prepositional phrase would be modifying Beatrix Potter alone... and, as someone else pointed out above, she is not in her own book illustrations.
Also, someone mentioned above that pronouns can only come after their antecedents. It is usually true that pronouns come after antecedents, but it is not required. There are multiple examples in the OG in which the pronouns come before the antecedents.