The correct option is D A shallow harbour.
"We shall endeavor to represent Sydney as it really is- to exhibit its spacious Gas-lit Streets, crowned by an active and thriving population- its Public Edifices, and its sumptuous shops, ....higher import, we shall display to our Readers the beautiful and commodious buildings raised by piety and industry for the use of Religion." This sentence from the passage supports the existence of religious buildings and spacious streets in Sydney. This eliminates option A and E as possible answer to the question asked. The sentence "...at least three miles of water frontage, at any part of which vessels of the heaviest burden can safely approach the wharves....The principal thoroughfares run north and south, parallel to Darling Harbor, and are crossed at right angles by shorter streets." support the existence of a long coastline and perpendicular side streets which takes out options B and C. Only a shallow harbour is not a characteristic of Sydney according to the passage. Thus, D is our answer.