The correct option is A Must be
The given passage is based on the importance of punctuality.
'Punctuality' is a good habit, hence the modal for the blank refers to an obligation or compulsion.
Option C: 'Must' is a modal that refers to an obligation or compulsion. It tells a person what he has to do. It stresses on the cultivation of punctuality as a habit.
Hence option C is correct.
Options A, B and D: 'Need' as a modal refers to a necessity or an obligation. It is commonly used in Negatives and Interrogatives.
Hence the form 'need be' is not relevant here, and option B can be eliminated.
The given sentence is not a negative, as 'punctuality' is a good habit.
The passage stresses on why it is a positive aspect that should be cultivated. It does not tell the reader that punctuality 'must not be' cultivated, or 'need not be cultivated'.
The line 'We hardly realize that in being late, how much annoyance and worry we unnecessarily...' proves that punctuality is necessary.
Hence, options A, B and D are incorrect.