I would say that punctuation, ie a comma , would precede the block quotation to set it apart and then quotation marks would be used to show that it is a quotation, both at the beginning and end of the passage. Quotations are good to show exactly what the author quoted meant so there is no doubt and which can then be accurately commented on.
The line that best paraphrases the excerpt is A. And when I think that I’ll never see you again, beautiful creature (...).
To paraphrase is to express the meaning of something by rewording it in a different way. Both the excerpt and option A express the same: that the poet is considering the possibility of never looking at the beautiful "creature" again.
The correct answer should be A
To not convestate whith the lotnas monster