Hi CEdward,
To start, the prompt tells us exactly how many 'letters' are in this particular language: 5 (2 vowels and 3 consonants) - not the 26 letters that you are referring to in your post. The Combination Formula could potentially apply IF you were not allowed to use a particular letter more than once in a word (and the order of the letters didn't matter), but there are no such restrictions in this question (and I don't know any languages that are based on either of those 'rules', so there's no reason to assume that either of those rules would apply here).
Based on what we are given, we have the following 'facts' to work with:
-We can only form 5-letter words.
-The 1st, 3rd and 5th letters are consonants (and there are only 3 to choose from)
-The 2nd and 4th letters are vowels (and there are only 2 to choose from)
-There are no restrictions on using duplicate letters, so it stands to reason that the consonants and/or vowels could be the SAME consonant/vowel.
This points to a straight Permutation: (3)(2)(3)(2)(3).
GMAT assassins aren't born, they're made,
Rich