The group of the Pleiades, although lying outside the main course of the galaxy, are connected to it by a faint loop and is the scene of the most remarkable association of stars and nebulous matter known in the visible universe.

A) are connected to it by a faint loop and is
B) are connected to them by a faint loop and are
C) is connected to it by a faint loop and is
D) is connected to them by a faint loop and they are
E) is connected to it by a faint loop, which is

'the group of Pleiades' is singular. Hence options A & B are out.
In option D, the plural verb 'are' refers to the singular noun 'the Group of Pleiades'. Hence SV agreement error.
In option E, the relative pronoun 'which' refers to the faint loop. But it should refer to the group of Pleiades. Hence Incorrect.
So C is the winner. In C, the pronoun, 'it' correctly refers to Galaxy and the SV agreement is correct too.

The group of the Pleiades...requires a singular verb "is", hence options A and B are eliminated.

Among the other options,

C) is connected to it by a faint loop and is - correct
D) is connected to them by a faint loop and they are - incorrect, since "they" doesn't agree with it's predecent
E) is connected to it by a faint loop, which is - incorrect, since "which" refers to the "faint loop" where the sentence continues to describe a phenomenon where some thing is connected to the Galaxy.

IMO C

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STEP 1 - UNDERSTANDING INTENDED MEANING

Let’ break the sentence to derive the intended meaning, identifying the errors along the way:

The group of the Pleiades, although lying outside the main course of the galaxy,
are connected to it by a faint loop
and
is the scene of the most remarkable association of stars and nebulous matter known in the visible universe.

ERROR:
1. SV pair does not agree in number: The subject is a group noun “group” which is singular. Thus, the plural verb “are” does not agree with this singular noun.

INTENDED MEANING
1. The group of the Pleiades (“of the Pleiades” is a prepositional phrase) is a group that lies outside the main course of the galaxy.
2. But this group is connected to the galaxy (it) by a faint loop.
3. (Since “and” is the connector, the subject of the two clauses will be the same)This group is where we can see the most remarkable association of stars and nebulous matter known in the visible universe.

STEP 2 - ELIMINATE CHOICES

B) are connected to them by a faint loop and are
( The two plural “are” do not agree with the singular subject “group”. Also, “them” is a plural pronoun incorrectly referring to a singular noun “galaxy”. And if “them” is referring to the “Pleiades” then the intended meaning is the group is connected to the Pleiades by a loop. This is not the intended meaning. Incorrect Choice)

C) is connected to it by a faint loop and is
(In line with the intended meaning. Correct Choice.)

D) is connected to them by a faint loop and they are
(“Them” is a plural pronoun incorrectly referring to a singular noun “galaxy”. “They” does not really have an antecedent – group, galaxy and loop are all singular. Thus, the “they” can only refer to “Pleiades” which should be plural (since we are saying “group of the Pleiades”). This would lead to the same error as in choice B. “They” are the scene implies that the Pleiades are the scene- again not per the implied meaning. Incorrect Choice)

E) is connected to it by a faint loop, which is
(The “which” modifies the “loop” implying the loop is the scene of the most remarkable association of stars, etc. This is not per the intended meaning. Incorrect Choice.)
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The group of the Pleiades, although lying outside the main course of the galaxy, are connected to it by a faint loop and is the scene of the most remarkable association of stars and nebulous matter known in the visible universe.

A) are connected to it by a faint loop and is
B) are connected to them by a faint loop and are
C) is connected to it by a faint loop and is
D) is connected to them by a faint loop and they are
E) is connected to it by a faint loop, which is

Solution:

Subject verb agreement
‘The group of Pleiades’ is singular – should be followed by ‘is’
So eliminate A, B and D
In E – ‘which’ modifies the faint loop instead of Pleiades
Leaves us with C.
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