While Peregrine falcons are predators in the conventional sense, hunting and devouring other animals, mostly birds,

Here, the author is talking about peregrine falcons and parrots. The similarities in the way they eat.
Also, we have to understand how all the clauses in the sentences are divided.

Option A - Incorrect
This answer choice gives a double meaning. We are not sure whether it is saying that 'small birds, small mammals and parrots' turn out to be no less bloodthirsty and it is also saying that they are ones hunted and devoured.

Option B - Incorrect
Having the conjunction 'yet' in the sentence makes it improper as parrots are not listed as part of the falcon's meal.

Option C .- Correct
This answer choice gives the right division between the clauses in the sentence. It ends the first clause at 'mammals' and begins the second clause at 'parrot'.

Option D - Incorrect
This has the same issue as option B. Using 'and' changes the intended meaning of the sentence.

Option E - Incorrect
This sentence has no subject for the verb 'turns.' It doesn't really explain what the author is saying.