Sheila: Health experts generally agree that smoking a tobacco product

let us simplify the argument given -

Sheila
Smoking tobacco for many years --> very likely to be harmful to smoker's health

Tim
Grandfather smoked 3 cigars a day from age 14 + lived up to 96 years --> Smoking has no effect at all

Immediately, we see a problem with Tim's reasoning. He tries to negate Sheila's conclusion by providing a single counterexample(there might be hundreds of thousands of people who might have suffered severe consequences to their health after smoking). Tim makes a extremely broad statement based on just one example.
Moreover, we are not told whether his uncle lived a healthy life or not; we are only told that his uncle lived a long life.

Let us look at the answer options --

Option A - Correct answer

Note that Sheila says that smoking is "very likely" to cause cancer.

Option B - Incorrect

We do not know whether experts did NOT have access to information about Tim's grandfather.

Option C - Incorrect

Nowhere has it been mentioned that health experts have discounted his grandfather's case as an exception.

Option D - Incorrect

Tim does not assume. Rather, he assumes precisely the opposite -- that longevity and health are related (As in the case of his grandfather).

Option E - Incorrect

No. Tim does not make this assumption. Even if he did, it wouldn't be a weakness of his argument.