The author tries to list things that will prevent Balzac from admission to a high rank. Things should be listed in parallel.
Secondly, the main clause (not underlined) states: "his example...makes him influential". It makes sense then that the early part of the sentence begins with Balzac or Balzac's.
Let's look at answer E's core:
E) If Balzac's pace, shortcomings and tendency deny Balzac admission, his example makes him influential.
There is nothing wrong with the sentence. We have a list of 3 parallel items (pace, shortcomings, tendency) and the first clause makes it clear whom "his" refers to in "his example". The 2nd "Balzac" must be explicitly stated because using "him" would create a pronoun error ("him" cannot refer to possessive noun "Balzac's"; only possessive pronouns such as "his" can).
By contrast, answer D has multiple problems:
1) lack of parallel structures: the list in D is "Balzac's pace, shortcomings, and his tendency". Introducing "his" in front of tendency breaks the parallel structure. "John's determination, talent and luck serve him well" is better than "John's determination, talent and his luck serve him well"
2) Subject-verb disagreements. "Shortcomings that shows" matches a plural subject with a singular verb (should be "shortcomings that show"). "pace, shortcomings, and his tendency denies" commits the same error (should be "deny").
3) Pronoun error: it is incorrect to write "Balzac's pace denies him admission". As indicated above, "him" can refer to "Balzac" but it cannot legally refer to "Balzac's".
4) inefficiency: whereas E says "shortcomings of literary style", D says "shortcomings that shows in his writings". E's version is simpler and better in line with the other items in the list.
