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Some problem with OA, even though I agree, E, as a choice, makes more sense than any other.

(E) Because Madagascar was one of the last habitable areas of the earth to undergo human settlement, it is

it is supposed to refer to a noun, so human settlement /earth / or Madagascar? which one are we talking about here?
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Some problem with OA, even though I agree, E, as a choice, makes more sense than any other.

(E) Because Madagascar was one of the last habitable areas of the earth to undergo human settlement, it is

it is supposed to refer to a noun, so human settlement /earth / or Madagascar? which one are we talking about here?
Hi ueh55406, pronoun it is indeed ambiguous here.

In case of pronoun ambiguity, application of following rule often comes in handy:

Pronoun-subject in one clause can be presumed to refer to noun-subject of another clause.

The two clauses here are:

i) Because Madagascar was one of the last habitable areas of the earth to undergo human settlement - Madagascar is the noun-subject

ii) it is an ideal site for researching rare flora and fauna - it is the pronoun-subject

So, it refers to Madagascar. So, despite the ambiguity, this will be considered a valid construct.

Having said that, it's worth noting that pronoun ambiguity should not be the only reason to eliminate an answer choice.

p.s. Our book EducationAisle Sentence Correction Nirvana discusses Pronoun ambiguity, its application and examples in significant detail. If you or someone is interested, PM me your email-id; I can mail the corresponding section.
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In option A ,which modifies "Human Settlement". This construction creates an erroneous meaning, The sentence suggests that "human settlement made it ideal to study Madagascar". The clearly is not the intended meaning.

In option B the usage of "that" is not correct. That should be immediately followed by a noun.

In option C ,which modifies the earth. This construction creates an erroneous meaning, The sentence suggests that "Earth made it ideal to study Madagascar". The clearly is not the intended meaning.

In option D The meaning conveyed by this option is that the reason my Madagascar is ideal to be studied is that Madagascar underwent human settlement. This is also clearly not the intended meaning

we are left with option E which conveys the actual meaning

Hope this reasoning helps :)
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