Yes I think he actually sleeps there because throughout the whole poem he talks about how he loves this girl an how beautiful she is. Also by the other Edgar Allen Poe poems and stories I've read by him he seems to talk about death and is very literal about it.
The best answer is the first option:
<span>For seven nights, he sneaks into the old man’s room and watches the sleeping man.
A good way to select the right answer is to read all of the options out loud. Which combination of the sentences sounds the most fluid and logical when you read it, and best preserves the meaning of the sentence? The first option does this best. </span>
That the family will discontinue the discipline Helen has recently learned.