This castle was built on this site by the royal family over a period of five hundred years; the hill on which it stood was of great strategic importance.
A) This castle was built by the royal family on this site over a period of five hundred years; the hill on which it stood was of great strategic importance --stood is wrong
B) this castle had been built on this site by the royal family over a period of five hundred years; the hill on which it stands was of great strategic importance -- had been not required
C) This castle was built on this site by the royal family over a period of five hundred years; the hill on which it is now standing was of great strategic importance ---- awkward (standing)
D) The royal family built this castle on this site over a period of five hundred years; the hill on which it stood was of great strategic importance ---- stood wrong
E) The royal family built this castle on this site over a period of five hundred years; the hill on which it stands was of great strategic importan --- correct