The answer is D. Mitty would rather dream than attend to errands. He's not literally shooting a pistol, so B and C are not the answer. A. can't really be proved with this passage, also he specifies what biscuit he wants.
Answer: Therefore
Explanation: Therefore means that 'as a result' , 'thus', 'consequently'
As we can see here, there is an excuse of Mrs. Eaton saying what she has to do today, meaning that these stuff (doing laundry, walking the dog and so on) show us how busy she is. So, the sentence "I'm busy" shows that she is busy with doing/completing these stuff.
