It means that as you are having fun, you're also basically "wasting" your time. Without even realizing, it can be past a few hours and you're at your home having a party and then you realize that you've wasted so much time having fun that you didn't even notice that time was ticking by. This is just an example.
The answer is c because the subject is the topic of the story pretty much like if I where to write something about myself I would be the subject and let's say the theme is about bravery and I have to deal with that so yeah C
