Judging by the excerpt provided from his first address to Parliament, the two ways that Winston Churchill arouses patriotic feelings in his audience is by him creating optimism and determination by constantly repeating that Great Britain will never surrender. So, your answer is D ) He creates optimism and determination by constantly repeating that Great Britain will never surrender.
Yes, it seems to be an alternative, in some situations acceptable, but eccentric and not neutral spelling of this word. It accents the fact that "ea" here are two separate vowels rather than a diphthong: that is the function of the trema (the two dots).
In practice it's not used much, because it's not really necessary: it does not distinguish it from any other word, and trema is not easy to find on English keyboards: so there is no need.
