As a result of having nostrils, called nares, connected to olfactory

Yes, I could not find any convincing reasoning why as a result of + gerund is wrong. Therefore I would approach the question in a different way:

V-A-N rule (Manhattan GMAT SC strategy guide) - verbs preferred to adjectives, adjectives preferred to nouns. The following examples are from the Manhattan SC guide:

Wordy: Her example was an inspiration (noun) to me. Better: Her example inspired (verb) me.
Wordy: They made a reference (noun) to the strike. Better: They referred (verb) to the strike.

In our example:
having nostrils - having is a gerund, i.e. a noun (gerund is a verb used as a noun)
have: a verb

As per V-A-N rule, verbs are preferred to nouns. Therefore, I would go with C.

A word of caution: V-A-N rule is to be used as a last resort,when other more serious grammatical or meaning errors cannot be identified.