I think you're misunderstanding the question task, or misreading the choice, because you are correct about the meaning of "held in."
Your job on this question is to find a choice that allows both parts of the contradiction to be true. First you must find the contradiction.
Here:
Before 2Bill years ago, the sun was dimmer. If it were that dim now, oceans would freeze. But back then, the oceans did not freeze.
So the big question is WHY?
If a dim sun would make the oceans freeze now, why didn't it make the oceans freeze back then?
(A) Today the atmosphere holds in less heat. Ah-ha! This gives an additional reason why the oceans would freeze today with a dim sun, and gives a reason why they didn't freeze in the past (when the atmosphere held in more heat).
(E) so what? Discussing what happens when large portions of the globe are covered in ice does not help us. We need something that explains why the globe was NOT covered in ice 3.8 billion years ago.
See what I mean?