A simile is a figure of speech that is used to explicitly compare two elements of a different kind. Within this excerpt, the explicit comparison is:
<em>his brown skin hung in strips
</em>
<u><em>like ancient wallpaper,</em></u><em> </em>
<em>and its pattern of darker brown
</em>
<u><em>was like wallpaper:</em></u>
Therefore, the statement that best describes the effect of simile on the overall meaning in this excerpt is C. It compares the fish's skin to wallpaper to support the image of a shabby but admirable fish because it conveys the image of a ragged, damaged but <em>tremendous</em> fish.