Sentence Correction

Although a surge in retail sales have raised hopes that there is a recovery finally underway,
many economists say that without a large amount of spending the recovery might not last.

A)have raised hopes that there is a recovery finally
B)raised hopes for there being a recovery finally
C)had raised hopes for a recovery finally being
D)has raised hopes that a recovery is finally
E)raised hopes for a recovery finally

Though I could pick the correct answer quite easily because of "Tense" and "Meaning" issues. I still have couple of questions regarding explanations provided by OG.
1. Which on is better or correct and why? - "raised hopes for X finally" or "raised hopes that X is finally"
Would D still be correct if it was - "has raised hopes for a recovery finally underway"?

2. In option A, why is "there is" incorrect?

I would request experts to through some light.

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Although this does not answer your questions, I find this very important advice for people on the GMAT. Do not worry about the other pieces of the sentence once you have found an error. Making sense of them will drive you crazy because often the wording is altered to make the mistake you already found sound a bit better. Stick with the low hanging fruit and practice finding where the GMAT leaves the 'easier errors.'