The correct option is B That
'Which' and 'that' are relative pronouns that usually introduce relative clauses. They are often confused with one another. A way to remember which of these must be used, is this:
'Which' is used when the clause that follows does not change the meaning of the sentence. For example, 'Diamonds, which are rare, are expensive.'
'That' is used when the clause that follows is essential to the sentence. The given sentence, for example: 'They were looking at' makes the painting more specific, saying that 'this particular painting that was being looked at, was painted by my sister.'
Hence the underlined word needs to be changed to 'that'.
So, option D is correct and A is incorrect.
Option A: 'What' introduces a clause that is either a subject or an object of a sentence. Hence A is incorrect.
Option C: 'Whom' refers to people, here the noun in question is a painting. Hence C is incorrect.