It's okay to put some adjectives after a verb, and loose is one such adjective. In this case we don't want to modify transported. That is, the transportation was not done in a loose manner.

Salt is transported loose just means that it is not packed.

Another example:
The front wheel came loose.
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While the use of "loose" vs "loosely" could be debated, and I don't know of a grammatical rule that prefers the use of one over the other, there are other things wrong with the sentence you can use to eliminate options. I like this sentence because it makes the test taker focus on stylistic issue while masking grammatical issues, such as:

1) Oxford comma; no need for a comma before "and" as it's not a list
2) While we're at it, no need for "and". "And" is a conjunction that introduces two separate ideas; note that "and" does not show causation. "and so" is used to show causation when only "so" would have sufficed. This creates redundancy.
3) 'B' is much cleaner and has better construction when compared to the awkward and wordy 'A' - if you absolutely must fixate on stylistic issues, construction is the safest metric you can use as it's a lot easier to get right as opposed to the "loose" v/s "loosely" debate.

(E) is wrong because "as" is used to show causation when its purpose is to introduce a new idea; "so" is a better bet. (D) makes the classic "being" mistake where the author tries to use it as a verb. Hot tip: if you can swap out "being" for "is" or "was" and the sentence still makes sense, it's probably being used incorrectly.
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Under the Department of Transportation's old rules, salt could be transported loosely, and so it was not necessary to have advanced packaging facilities.

A) loosely, and so it was not necessary to have advanced packaging facilities. -use of loosely/ it is incorrect
B) loose, so advanced packaging facilities were unnecessary. -Correct
C) loosely, and so there was no necessity for advanced packaging facilities. -use of loosely is incorrect
D) loose, there being no necessity for advanced packaging facilities. -use of being is incorrect ,since we are using could already in non underlined part
E) loosely, as no advanced packaging facilities were necessary. use of loosely is incorrect.

You have use "loose" rather than "loosely".

Than only remaining options are B and D.
Than obiviously B looks much better than D.

Posted from my mobile device
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POE:

I believe "unnecessary" is preferred over not necessary/no necessity.

this question seems incorrect

loosely has to be used (transported is a verb)

there is a difference bew. unnecessary and not necessary (if you guys have done critical reasoning, you all will know the difference)

It's also important to look at the meaning. In D and E, the meaning changes. It says BECAUSE there were no advanced packaging facilities, the salt was sold loose. But the intended meaning is- BECAUSE salt was sold loose, there was no need for packaging facilities.

Posted from my mobile device

I think the best way to analyze the sentence is...

'Loosly' is an adverb which is modifying the word 'transported' . However looking at the sentence we can clearly say that this sentence is discussing whether loose salt is allowed to transport or packaging is necessary ? Based on the sentence construction, we can say that loose should be used as adjective which can modify salt. Therefore, loose is the right word to pick.

Other way to write the sentence is

Under the Department of Transportation's old rules, loose salt could be transported, so advanced packaging facilities were unnecessary.

Now within option B and D, B is the right answer.

Definitely not a strong decision point.

Here loose or loosely needs to be used for salt, and not for how it's transported. Since loose is an adjective, it is the correct word to describe salt.

My approach -
"loose" is an adjective and "loosely" is an adverb, here we want to modify "salt" so we can not use adverb for that and thus we have to use adjective "loose", left with options B & D.
The sentence is trying to show the advancement here, the use of "so" is perfect. B is the answer.

GMATNinja generis I read in one of your posts that we can not have 2 coordinating conjunction next to each other, can this be a general rue?
And can this be the basis for us to remove options A & C?

Also, please help me in understanding whether my approach used above is correct? Thanks a lot