Here, we have to pay attention to the meaning.
(A) that the elephant that gave rides to children at the Whipsnade Zoo was earning
The usual structure of idiom : note something as something. For example,
John notes his mother's care as typical example of motherhood. Yet, the structure in the question is quite inverted:
Barbara Wootton once noted that the elephant that gave rides to children at the Whipsnade Zoo was earning annually exactly what she earned as director of adult education for London as a humurous example of income maldistribution.
As you see, how difficult it is to read this sentence with usual structure. Hence, The structure is inverted to make it easier to read.
that the elephant that gave rides to children at the Whipsnade Zoo was earning as high as director was a humurous example of income maldistribution.
Answer choice (A) gives the intended meaning clearly and exactly.
(B) that the elephant, giving rides to children at the Whipsnade Zoo, had been earning
1) Change in meaning: Note that if there are more than one gramatically correct answer choices, you should go with one that keeps the original meaning. Answer choice (B) does not have gramatical problems, but changes the meaning significantly:
This choice says that when Barbara Wootton noted, the elephant had already stopped earning as high as she earned as a director. Besides, The original meaning is better: Barbara Wootton logiclly compared the amount of money she earned with that the elphant earned at the same time.
(C) that there was an elephant giving rides to the children at the Whipsnade Zoo, and it earned
1) illogical and not intended meaning: Unlike (A), (C) says that there was an elephant giving rides to the children at the Whipsnade Zoo was a humurous example of income maldistribution. Not so. the presence of an elphant is not a humurous example of income maldistribution. Yet, How much that elphant was earning was a humurous example of income maldistribution.
"comma + and it earned": "clause + comma + and + clause" usually shows that those two clauses give different ideas. For example,
There is Tom looking at stars, and he has achieved a perfect score on gmat.
(D) the elephant that gave rides to children at the Whipsnade Zoo and was earning
1) Barbara Wootton did not noted the elephant as an example, but how much that elephant was earning. For example,
1) The recent investigation shows that Tom has killed Jerry
2) The recent investigation shows Tom killing Jerry
As you see, (1) says that the investigation shows "what Tom has done", Whereas (2) says the investigation shows "Tom"
(E) the elephant giving rides to children at the Whipsnade Zoo and that it earned
1) The same problem as in (D)
2) Error of parallelism: "the elephant giving rides to children at the Whipsnade Zoo and that it earned"