Rickooreo
1. For option B - How does the use of noun + that differ from use of and + that? What can "that" when used as "and that" modify? Subject of previous clause?
Also to confirm irrespective whether it is comma + and that or 'no' comma + and that .....that will modify subject
2. Option C - Isn't option C wordy
Instead of - and it is believed to have been
It should have been - and it has been believed
"That" has many uses in GMAT SC, and is a useful word to look out for. But it is tricky, because it has so many uses. Most commonly, 'that' is used as a modifier: "The dog that I love is cute" "Dogs that play fetch make the best pets."
But 'that' has other uses as well. It can be used as a conjunction for verbs (or modifiers-from-verbs) like "believe" or "suspect" or "said":
"My manager has realized that I am stealing pens from the office."
"The angry crowd interrupted the politician's speech, yelling that he had misled them with false promises."
(This version of 'that' always feels like both a modifier and a conjunction to me).
But 'that' can also be a noun or pronoun, which is how it is used in B. When 'B' says, "And that is believed to be," it's referencing another noun in the sentence. What is 'that?' Well, it would have to be the Quetzalcoatlus, to be the 'largest flying creature.' However, the use of 'that' really indicates a specificity. And we're not talking about a specific individual creature, we're talking about the creature in general, as a species. (In general, I think it would be hard to find an OG question where 'that' is used as a subject like this in a correct answer... It's a bit too informal and vague).
"That" can be used as a subject, but in a weird sentence like: "That she is tall does not mean she excels at basketball." Here "That" is capturing the whole idea "she is tall."
Regarding C, if we make your suggested changes, we have:
"The Q has a wingspan of 36 feet, and it is has been believed the largest flying creature."
It's unclear structurally what 'largest flying creature' is doing here. "it" is the Q. So we have:
"The Q has a wingspan of 36 feet, and [the Q] has been believed the largest flying creature."
It's not clear there that the Q *is* a large flying creature.