Pronoun concept doubt - THAT vs IT

[sui generis]

Consider the following statement: "Calcium in milk is of higher quality that IT is in the health supplements".
The pronoun IT will refer to 'calcium in milk'

And in the following statement: Calcium in milk is of higher quality than THAT in the health supplements.
The pronoun THAT refers to 'calcium'

My doubt/question based on the above example is: does the pronoun IT always refers to the entire subject with prepositional clause and the pronoun THAT refers only to the SUBJECTIVE CASE NOUN of the phrase in the context of prepositional phrases ?

[GmatKiss]

Based on this concept we also have an official question. Just citing it for reference here.
In addition to having more protein -than wheat does, the protein in rice is higher quality than that in wheat, with more of the amino acids essential to
the human diet.

A) the protein in rice is higher quality than that in wheat
B) rice has protein of higher quality than that in wheat
C) the protein in rice is higher in quality than it is in wheat
D) rice protein is higher in quality than it is in wheat
E) rice has a protein higher in quality than wheat

IMO:B

[sui generis]

Based on this concept we also have an official question. Just citing it for reference here.
In addition to having more protein -than wheat does, the protein in rice is higher quality than that in wheat, with more of the amino acids essential to
the human diet.

A) the protein in rice is higher quality than that in wheat
B) rice has protein of higher quality than that in wheat
C) the protein in rice is higher in quality than it is in wheat
D) rice protein is higher in quality than it is in wheat
E) rice has a protein higher in quality than wheat

IMO:B

Thanks for the reply. It's indeed the correct answer but then I was not really looking for answer or explanation to this question rather I citied it just as a reference. In fact I have removed it now to avoid confusion/diversion.

What I really want is clarification of the concept that I mentioned above.

[aspirant2011]

Consider the following statement: "Calcium in milk is of higher quality that IT is in the health supplements".
The pronoun IT will refer to 'calcium in milk'

And in the following statement: Calcium in milk is of higher quality than THAT in the health supplements.
The pronoun THAT refers to 'calcium'

My doubt/question based on the above example is: does the pronoun IT always refers to the entire subject with prepositional clause and the pronoun THAT refers only to the SUBJECTIVE CASE NOUN of the phrase in the context of prepositional phrases ?

somehow I don't think so that it refers to calcium in milk, I think logically it's refering to Calcium............though that in second sentence is much better

[saketk]

Based on this concept we also have an official question. Just citing it for reference here.
In addition to having more protein -than wheat does, the protein in rice is higher quality than that in wheat, with more of the amino acids essential to
the human diet.

A) the protein in rice is higher quality than that in wheat
B) rice has protein of higher quality than that in wheat
C) the protein in rice is higher in quality than it is in wheat
D) rice protein is higher in quality than it is in wheat
E) rice has a protein higher in quality than wheat

IMO:B

Ok, now the part is correctly underlined.
The second thing to note here is that we can eliminate other option by simply looking at the part " protein of higher quality" which is the correct usage.
Saying "a protine" in option E is incorrect here. "Rice protein is higher is also" incorrect. We need "of" here.
IMO B