If the moral of the fable is given, then no they should not be interpreted in different ways. HOWEVER, if the reader is left off with their imagination, then yes! They can be interpreted in many different ways.
Setting is C
Antagonist is D
Protagonist is B
Theme is A
Plot is E
It's an adjective; "The smallest puppy" is the subject of the sentence as the rest of the sentence describes it. Of course the subject cannot just be "puppy" so it must include "The smallest" as well. Since smallest is an adjective (A word that describes something else,) that answer is Adjective.