I'd be very, very cautious about advice like "never pick _____" for a particular word. The GMAT doesn't test "words your mother would never let you use" (like curse words or "ain't"), so every word on the GMAT should have at least one proper use. "Being" is one such word that has developed that red-flag stigma, but it has proper uses (as a noun - "human being"; as a present tense verb - "I scolded the class for being too loud"; etc.).
"Yet" is required here for proper sentence structure. We need to include a transition for:
"four persons or eight hundred pounds of baggage so light that..."
That's a run-on description - and logically "eight hundred pounds of baggage" doesn't really make sense with "so light". (Not only is it heavy; we're given an exact weight so you wouldn't then re-describe it as "so light..." - we know exactly how light/heavy it is).
So we need a transition, and because it's somewhat surprising that "800 pounds of baggage" and "so light" are together we can go to the meaning of the sentence:
The canoe was quite sturdy (it could carry...) but it was also light enough that it was easy to transport.
See that "but" transition in there? We do need a "surprising" change of events signifier here, so "yet" is required.
Therefore E is correct - in this case, that other red-flag word "being" is in an improper tense as we're already using the past-tense "crafted" and "could carry / could portage", so we nee the past-tense "was" and not the present-tense "being".
I hope that helps...
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