the answer to question is c. surroundings
The best option seems to be E) heights
The word "steep" has many possible meanings. It can mean "to soak" something in a liquid in order to make it softer, for instance. But that does not fit in the context we have here.
In this case, especially because of the use of the verb "to descend" to describe the moon's action, option E sounds more plausible. It would be the same as saying, 'Of the moon that descends the heights of the soughing twilight'. One of the meanings of "steep" describes something that has the quality of being very high.